M.phil Thesis Management

A STUDY ON CUSTOMER PERCEPTION ATTITUDE AND
SATISFACTION TOWARDS HEALTH INSURANCE IN

ERODE DISTRICT
M.Phil., in Management
54
ABBREVIATIONS
1 ANOVA Analysis of Variance
2 BPL Below Poverty Line
3 CHI Commission for Health Improvement
4 CBHI Community-Based Health Insurance
5 CFI Comparative Fit Index
6 DEA Data Envelopment Analysis
7 DCP Day Care Procedure
8 DM Decision Maker
9 ESIS Employee State Insurance Scheme
10 ESI Employees State Insurance
11 ERM Enterprise Risk Management
12 FGD Focus Group Discussions
13 FICCI Federation of Indian Chamber of Commerce and Industry
14 FDI Foreign Direct Investment
15 GIC General Insurance Corporation of India
16 GIPSA General Insurance Public Sector Companies Association
17 GFI Goodness Fit Index
18 GDP Gross Domestic Product
19 GATS General Agreement on Trade in Services
20 GNP Gross National Product
21 IRDA Insurance Regulatory and Development Authority
22 ICR Incurred Claims Ratio
23 KMO Kaiser-Meyer-Oklin
24 SHG Self Help Groups
25 MSA Measure of Sampling Adequacy
26 NGO Non Governmental Organizations
55
27 NFI Normed fit index
28 NSSO National Sample Survey Organization
29 NCAER National Council of Applied Economic Research
30 NIPFP National Institute of Public Finance and Policy
31 OOP Out-Of-Pocket
32 PHC Primary Health Centres
33 PPN Preferred Provider Network
34 RAM Range Adjusted Measure
35 RFI Relative Fit Index
36 RMSEA Root Mean Square Error Approximation
37 RSBY Rashtriya Swasthiya Bima Yojna
38 SEWA Self-Employed Womens Association
39 TPA Third Party Administrator
40 UHI Universal Health Insurance
41 UNDP United Nation Development Programme
42 WTO World Trade Organization
43 WHO World Health Organization
56
CONTENTS
List of Contents
List of Tables
Chapter No Title of the Chapter Page No
I Introduction and Design of the Study 1
11 Review of Literature and Gap Analysis 17
111 Growth and Development of Health Insurance at Erode

53
District
IV Analysis of Consumers Perception and Attitude Towards

89
Health Insurance
V Analysis of Consumers Purchase Intention, Expectations

156
and Satisfaction Towards Health Insurance
VI Findings, Suggestions and Conclusion 215
Bibliography i - xvii
Appendix Questionnaire i xii
57
LIST OF TABLES
Table No Title of the Tables Page No

1.1 Number of Samples Selected for the study 8
3.1 Growth In Health Insurance Premium 67
3.2 Market Share: Non-Life Insurance 70
3.3 Retail Health Insurance Product- Market Comparison 72
3.4 Incurred Claim Ratio 73
3.5 Policies, Insured Members and Claims 82
3.6 Total Premium, Total Claim Paid and Claim Ratio 84
3.7 Average Premium, Average Claim Paid and Average Person
86
Insured Per Policy and Per Member
4.1 Location Wise and Age Wise Classifications 89
4.2 Gender and Qualification Wise Classification 90
4.3 Occupation Wise Classification 91
4.4 Marital Status and Family Type Wise Classification 92
4.5 Number of Dependents 93
4.6 Monthly Income Wise Classification 94
4.7 Insurance Type 95
4.8 Sum Insured Under the Health Insurance Policy 95
4.9 Number of Years Availing Health Insurance 96
4.10 Renewal Status of Health Insurance Policy 97
4.11 Nature of Health Insurance Company 98
4.12 Opinion About Source of Awareness 98
4.13 Opinion About Purchase Intention of Health Insurance
100
Policy
4.14 Opinion About Reason for Switch Over 102
4.15 Opinion About Customer Satisfaction 104
4.16 Location of Respondents and Source of Awareness for 106
Health Insurance Companies
4.17 Ages of the Respondents and Source of Awareness for 108
58
4.18 Gender of Respondent and Source of Awareness for Health
110
Insurance Companies
4.19 Educational Qualification And Source Of Awareness for
111
4.20 Occupation and Source of Awareness for Health Insurance
113
Companies
4.21 Marital Status and Source of Awareness About Health
115
Insurance Companies
4.22 Family Types and Source of Awareness for Health Insurance
116
Companies
4.23 Dependents of the Respondents and Source of Awareness for
117-118
4.24 Monthly Income and Source of Awareness for Health
119
Insurance Companies
4.25 Type of Insurance and Source of Awareness for Health
121
Insurance Companies
4.26 Sum Insured and Source of Awareness for Health Insurance
123
Companies
4.27 Number of Years Availing the Policy And Source of
125
Awareness for Health Insurance Companies
4.28 Renewal Status of Health Insurance Policy and Source of
127
4.29 Nature of Health Insurance Company and Source of
128-129
4.30 KMO and Bartlett's Test 130
4.31 Customer Attitude of Health Insurance Company and Policy 131-132
4.32 Factor Analysis For Customer Attitude Of Health Insurance
134-135
Company And Policy
4.33 Location of Respondents and Attitude Variables 137
59
4.37 Occupation of Respondents and Attitude Variables 142
4.38 Number of Dependents and Attitude Variables 143
4.39 Marital Status of the Respondents and Attitude Variables 144
4.40 Family Type of Respondents and Attitude Variables 145
4.41 Monthly Income of Respondents and Attitude Variables 147
4.42 Type of Insurance Policy and Attitude Variables 148
4.43 Sum Insured and Attitude Variables 150
4.44 Number of Years Availing Health Insurance Policy and
151
Attitude Variables
4.45 Renewal Status and Attitude Variables 153
4.46 Nature of Health Insurance Company and attitude Variables 154
5.1 Factor Analysis - KMO and Bartlett's Test for Sampling
156
Adequacy
5.2 Communality Values of all Variables of Deficiencies of
157
Health Insurance Company
5.3 Factor Analysis for Deficiencies of Health Insurance
159
Company and Policy
5.4 Difference Between Demographics and Different
160
Deficiencies Factors Extracted
5.5 Difference Between Age of the Respondents With Respect
161
to Different Deficiencies Factors Extracted
5.6 Difference Between Gender of the Respondents With
162
Respect To Different Deficiencies Factors Extracted
5.7 Difference Between Qualifications of the Respondents With
163
Respect to Different Deficiencies Factors Extracted
5.8 Difference Between Occupations of the Respondents With
164
5.9 Difference Between Numbers of Dependent of the
Respondents With Respect to Different Deficiencies Factors 165
Extracted
60
5.10 Difference Between Marital Statuses of the Respondents
166
With Respect to Different Deficiencies Factors Extracted
5.11 Difference Between Family Types of the Respondents With
167
5.12 Difference Between Monthly Income of the Respondents
168
5.13 Difference Between Type of Insurance Policy With Respect
169
to Different Deficiencies Factors Extracted
5.14 Difference Between Sum Insured Under The Health
Insurance Policy With Respect to Different Deficiencies 170
Factors Extracted
5.15 Difference Between Renewal Status of Health Insurance
Policy With Respect to Different Deficiencies Factors 171
Extracted
Policy With Respect to Different Deficiencies Factors 172
Extracted
5.17 Difference Between Nature of Health Insurance Company
173
5.18 Difference Between Demographics With Respect to Overall
Switchover, Customer Satisfaction, Perception, Expectation 174
And Purchase Intention
5.19 Difference Between Age of the Respondents With Respect
to Overall Switchover, Customer Satisfaction, Perception, 175
Expectation And Purchase Intention
5.20 Difference Between Gender of the Respondents With
Respect to Overall Switchover, Customer Satisfaction, 176
Perception, Expectation and Purchase Intention
5.21 Difference Between Qualification of the Respondents With
61
5.22 Difference Between Occupation of the Respondents With
5.23 Difference Between Marital Status of the Respondents With
Perception, Expectation And Purchase Intention
5.24 Difference Between Family Type of the Respondents with
5.25 Difference Between Monthly Income of the Respondents
with Respect to Overall Switchover, Customer Satisfaction, 181
5.26 Difference Between Number Of Dependents In The Family
With Respect To Overall Switchover, Customer Satisfaction, 182
Perception, Expectation And Purchase Intention
5.27 Difference Between Type Of Insurance Policy With Respect
to Overall Switchover, Customer Satisfaction, Perception, 183
Expectation and Purchase Intention
5.28 Difference Between Sum Insured Under the Health
Insurance Policy With Respect to Overall Switchover,
184
Customer Satisfaction, Perception, Expectation and Purchase
Intention
5.29 Difference Between Number of Years Availing the Health
Insurance Policy With Respect to Overall Switchover,
185
Customer Satisfaction, Perception, Expectation and Purchase
Intention
Policy With Respect to Overall Switchover, Customer 186
Satisfaction, Perception, Expectation And Purchase Intention
5.31 Difference Between Nature of Health Insurance Company
With Respect to Overall Switchover, Customer Satisfaction, 187
62
5.32 Relationship Between Customer Attitude, Deficiencies,
Switchover, Customer Satisfaction, Perception, Expectation 188
And Purchase Intention
5.33 Gap Between Perception And Expectation Of Customers 191
5.34 Perception of the Customers are Equal to Expectation of the 192-193
Customers Regarding Health Insurance Company
5.35 Overall Satisfaction of the Health Insurance Company 194
5.36 Summary of Regression Model 195
5.37 Impact of Overall Customer Satisfaction of Health Insurance
Companies on Customers Attitude, Perception, Expectation, 196
and Purchase Intention
5.38 Results and Fit Indices for Model Evaluation 197
5.39 Association Between Location of the Respondents and 198
Nature of the Health Insurance Companies
5.40 Nature of Health Insurance Companies And Age of 199
Respondents
5.41 Association Between Gender of the Respondents and Nature 200
Of The Health Insurance Companies
5.42 Association Between Qualification of the Respondents and 201
5.43 Association Between Occupation of the Respondents and 202
5.44 Association Between Marital Status Of The Respondents 203
And Nature Of The Health Insurance Companies
5.45 Association Between Family Type of the Respondents and 204
5.46 Association Between Dependents of the Respondents and 205
5.47 Association Between Monthly Income of the Respondents 206
And Nature of the Health Insurance Companies
5.48 Association Between Insurance Type of the Respondents 207
and Nature of the Health Insurance Companies
5.49 Association Between Sum Insured Under The Insurance 208
Policy And Nature of the Health Insurance Companies
5.50 Association Between Renewal Status of the Insurance Policy 209
and Nature of the Health Insurance Companies
5.51 Association Between Number of Years Availing the
Insurance Policy And Nature of the Health Insurance 210
Companies
63
5.52 Association Between Time Taken for Reimbursement Claim
By Insurance Company and Nature of the Health Insurance 211
Companies
5.53 Difference Between Time Taken For Reimbursement Claim
By Insurance Company With Respect to Overall 213
Satisfaction, Attitude, Perception, Expectation, Deficiencies,
Purchase Intention and Switch Over
5.54 Descriptive and CRONBACHS Alpha Coefficients Of The 214
Measuring Instrument
64
LIST OF FIGURE
Figure
Title of the Figure Page No
No
3.1 Growth in Health Insurance Premium 67
3.2 Non-Life Insurance Company- Segment Wise Premium
68
(2007and 2009)
3.3 Market share (health insurance) - private players (2009 -2011) 70
3.4 Market Share: Non-Life Insurance (2011 2014) 71
3.5 Annual Losses Due to Insurance Fraud 76
3.6 Policies, Insured Members and Claims 83
3.7 Total Premium, Total Claim Paid and Claim Ratio 85
3.8 Average Premium, Average Claim Paid and Average Person
87
Insured Per Policy and Per Member
4.1 Occupation Wise Classification 92
4.2 Opinion about Source of Awareness 99
4.3 Opinion about Purchase Intention of Health Insurance Policy 101
4.4 Opinion about Reason for Switch Over 103
4.5 Opinion about Customer Satisfaction 105
4.6 Factor Analysis for Customer Attitude of Health Insurance
133
Company and Policy
5.1 Factor Analysis for Deficiencies of Health Insurance Company
158
and Policy
5.2 Structural Equation Modeling for Customer Satisfaction 197
65
CHAPTER I
INTRODUCTION AND DESIGN OF THE STUDY
1.1 INTRODUCTION
Insurance is the backbone of a countrys risk management system. Risk is an
inherent part of our lives. The insurance providers offer a variety of products to businesses
and individuals in order to provide protection from risk and to ensure financial security.
Insurance is an important component in the financial intermediation chain of a country and
is a source of long-term capital for infrastructure and long-term projects. Through their
participation in financial markets, they also provide support in stabilizing the markets by
evening out any fluctuations. Human beings always sought security. This quest for security
was an important motivating force in the earliest formation of families, clans, tribes and
other groups. Indeed, groups have been the primary source of both emotional and physical
security, since the beginning of mankind. The insurance providers helped their less
fortunate members in the time of crisis. Humans today continue their quest to achieve
security and reduce uncertainties and for this they rely on groups for financial stability.
The group may be our employers, the government or an insurance company, but the
concept is same. In some ways, however we today are more vulnerable than ancestors. The
physical and economic security formerly provided by the tribes or extended family is
diminishing with industrialization. Our income-dependent, wealth acquiring life style
renders us and our family more vulnerable to environmental and societal changes over
which we have no control. More formalized means are required for mitigating the adverse
consequences of unemployment, loss of health, death, old age, lawsuits and destruction of
our property. Although individuals cannot predict or completely prevent such occurrences,
they can provide for their financial losses. The function of insurance is to safeguard against
such misfortune through contribution of many who pay for the losses of the unfortunate
few. This is the essence of insurance - the sharing of losses and, in the process, the
substitution of certain, small loss called the premium for an uncertain, large loss (Black
and Skipper, 2003). In other words, insurance is a method which provides security and
protection against financial loss upto some limit. It means of shifting of risks to insurer in
consideration of a nominal cost called premium. Risks may be transferred in two ways:
firstly, a person may seek to transfer the activity or avoid such event which creates the risk;
66
for example, a civil engineering contractor may give sub-contract to another. Alternatively,
contractual agreement may be made to shift responsibility for any losses attributable to the
occurrence of specified uncertain event to the other person who is a party to the contract.
Exclusion and indemnity clause in a contract of sale, building, transport means and similar
other contracts are a few examples. In fact, the most important form of risk transfer is
insurance.
The Indian health insurance industry was primarily dormant before the opening up
of the market for private players. It is only after the privatization of the health insurance
market and introduction of the insurance regulator that one has seen rapid growth in this
segment. The growth is also fueled by the complexities and challenges within the health
care market. The health needs of the population are majorly funded through private means
and different options are being explored for financing of health care in the Indian context.
The social sector was deprived of the benefits of health insurance and it is only recently
that the health insurance schemes for the population below poverty line had been launched
by the government. Since, health insurance as a mechanism is a combination of financing
and service delivery of healthcare; it has its own complexities and requires a thorough
investigation of the relationships and intricacies involved among different stakeholders.
1.2 NEED OF THE STUDY
Health insurance is an important vehicle for health care financing, especially in a

country like India. The growth of health insurance in India will require: a better
understanding of the perceptions of healthcare providers and the stakeholders; answers to
question linked to relationship between hospitalization cost paid by the insurer,
components of hospitalization cost (room rent, consultation charges, surgeon charges,
investigations and medicine) and risk covered by the insurers; the study of industry
competiveness and trends to identify existing gaps; analysis of the advent of liberalization
lead to the imminent entry of global players in the insurance sector that the Indian
companies began to feel the winds of change and started gearing up to meet the challenge.
Various foreign private health insurers flocked the Indian Insurance Industry to tap the
uninsured potential market. In the run to capture their share, these private players have
stepped into new marketing techniques like innovate offers, customer centric products,
sound risk management practices so as to enhance service standards and to leave a
67
landmark in service sector. This is Indias first-ever customer satisfaction from the
insurance sector. Based on the previous studies further research is necessary to know the
customer perception, attitude and satisfaction towards health insurance.
1.3 THE STATEMENT OF THE PROBLEM
Based on the above discussions and given the current state of health insurance in
India, the problems are multiple. Starting from the lack of literature in the area of health
insurance since the opening of the insurance market to problems related to products,
services and processes. The problems have been identified post literature review and also
by analyzing the past, current and future growth prospects of health insurance in India.
Based on the above discussions and existing subject knowledge, four critical problems
emerge that need to be addressed. Each of these problems is critical and somewhere
interconnected to an extent that the solutions of each will help develop a comprehensive
framework for synergy among insurers and providers. The problems had not been
prioritized as each has a distinct area and are presented in no specific order. The Indian
insurance sector has started showing signs of significant changes after opening of Industry
to private players. With a large population base and huge untapped market, Insurance
industry is a big opportunity area in India for national as well as for foreign investors. A
huge uninsured population and low market penetration are the two main challenges to the
Indian Insurance Industry. It is really an attempt on the part of the researcher to examine to
analyze customer attitude, satisfaction and perception towards purchase of Health
Insurance products from Government sectors, Private insurance companies and Stand-
alone companies. Health Insurance is completely a customer focused business and
therefore it is very important to understand the role and future trend towards Government
sectors, private insurance companies and Stand-alone companies in India. In the present
study has been made an attempt to measure the attitude, perception and satisfaction level of
customers related to the various products of companies Health insurance. The following
issues are found to be relevant:-
To what extent the demographic characteristics of customers influence the Health

insurance market in Erode district?
68
How far have the factors influenced the level of satisfaction about Health insurance
market in Erode district?
What influence did the attitude of the customers have on the functioning of the
Health insurance market in Erode district?
How do the promotional measures of the Health insurance companies attract the
customers to take insurance policy?
To what extent the does the gap between customer expectations and perception
towards various aspects of the health insurance companies affect the satisfaction
level of customers?
The study was undertaken to understand the various factors in terms of decision
variables which influence the consumers preferences and in understanding the criticality
of these factors in choosing health insurance companies products in Erode district.
1.4 PROFILE OF THE STUDY AREA
Erode District is one of the western districts of the state of Tamil Nadu, India,
with Erode as its headquarters. The district is bounded by Chamarajanagar
district of Karnataka to the north, and by Kaveri River to the east. Across the Kaveri
lies Salem,Namakkal and Karur districts. Tirupur District lies immediately to the south,
and Coimbatore and the Nilgiris district lie to the west. Erode District is landlocked and is
situated between 10 36 and 11 58 north Latitude and between 76 49 and 77 58 east
Longitude. Western Ghats traverse across the district giving rise to small hills and hillocks.
The district comprises a long undulating plain, sloping gently towards the Kavery river in
the south-east.
1.5 OPERATIONAL DEFINITIONS
1.5.1 Claim
The process of applying to the insurer for reimbursement of expenses incurred for
treatment is called filing a claim.
1.5.2 Cashless services
69
The insurer or its TPAs have tie-ups with the network of hospitals. The insured
can get treatment for the disease without any cash payment from this network of hospital
and this is called cashless services.
1.5.3 Coverage Amount
It is the maximum amount payable in the event of a claim. It is also known as sum
insured and sum assured.
1.5.4 Cumulative bonus
Each claim free year ensures that you get a benefit known as cumulative bonus
and it is similar to no claim discount concept.
1.5.5 Domiciliary Hospitalization
When treatment of a patient is carried out at home, as per the doctors

recommendation, it is called domiciliary hospitalization.
1.5.6 Exclusions
These are the conditions for which medical expenses are not covered. It can be two
types Permanent exclusion or first time exclusion.
1.5.7 Moral Hazard
It is a term used to describe the phenomena where the customer seeks an undue
advantage, as a result of buying insurance or where customer has not acted in good faith
and has provided misleading information.
1.5.8 Network Hospital
These are hospitals and nursing homes which are associated with TPAs to provide
cashless mediclaim facilities to the insured.
70
1.5.9 No Claim Discount
It is a discount on the basic premium, if there is a claim-free year of policy. In other

words, if the insured person does not make any claim on his/her policy, then he/she gets a
discount (from 5% to 25%) on basic premium for every claim-free year.
1.5.10 Pre-existing disease
A pre-existing disease is any ailment or disease with which a person is already

suffering at the time of purchasing health insurance.
1.5.11 Renewal
Health insurance policies are usually annual contracts. At the end of the policy
period, the policy has to be renewed by the insurers.
1.5.12 Reimbursement
Under Health Insurance policy, the cost of various hospital charges (such as bed
charges, medicines, lab tests, surgeons fee etc.) are paid back to the insured who makes
the claim.
1.5.13 Third Party Administrator (TPA)
TPAs are authorized claims settling agents of the insurer. They scrutinize the
expenses incurred vis--vis coverage under the policy and also ensure compliance of the
policy terms, conditions and warranties.
1.5.14 Co-payment or Co-pay
It is a payment definition in the health insurance contract and paid by the insured
person each time when medical services are availed.
1.5.15 Deductible
It can be defined as the amount of expenses that must be paid out of pocket before
an insurer will cover any medical expenses.
71
1.6 OBJECTIVES OF THE STUDY
1. To exhibit demographic profile of Health Insurance policyholders in Erode

district.
2. To examine attitude of the customers towards Health Insurance policy.
3. To study the customers perception towards services provided by the health
insurance companies.
4. To analyse the buying motives that influence the customers to purchase Health
insurance policy.
5. To measure the level of satisfaction among the customers towards Health
Insurance policy.
6. To find out the problems faced by the customers in Health Insurance.
7. To offer suggestions based on the findings of the study.
1.7 RESEARCH METHODOLOGY
Research methodology enlightens the methods to be followed in research works

starting from investigation to the presentation of research report. The research
methodology focuses on the methods to be adopted at various steps in research process. It
includes research design, the area of the study, population of the study, sampling design,
sources of data, collection of data, analysis of data and limitations.
1.7.1 Research Design
Research design is the blue print of the various methods for conducting the
research projects. It includes the procedures for obtaining the information needed, the way
in which they are processed and the method of presentation of the result to solve the
research problems. Even though the research designs are too many, the present study
followed the descriptive research design.
Since the present study has made an attempt to explain the demographic profile of
the health insurance policy holders, and to study the perception and attitude of customers
towards health insurance policy, it is descriptive in nature. Apart from this, the present
study has its own objectives and pre-planned methodology to fulfill the objectives, it is in
72
descriptive nature. And also measure the level of satisfaction among the customers
towards the services offered by the health insurance companies,
it is also descriptive in nature. Hence, the applied research design of the study is
descriptive research.
1.7.2 Sampling Framework and Design
Population can be defined as the target group which the researcher wants to know
about by studying one or more of its samples (Tirupati, 2005)1. The population of Erode
district is 2,259,608 as per census of India 2011. However, the total number of policy
holders of health insurance is not available.
1.7.3 Sample Size
The total number of health insurance policy holders is not available. There are
ninety two villages/cities in Erode district. The researcher covered all ninety two villages
for collecting the sample respondents. The sample size is 650 respondents from the Erode
district.
1.7.4 Sampling Method
Purposive sampling was used to select the sample respondents, as random sampling
could not be used due to non-availability of population details.
The applied sampling procedure in the present study is purposive sampling. The
distribution of samples is shown in Table 1.1.
TABLE 1.1
NUMBER OF SAMPLES SELECTED FOR THE STUDY
Number of policy holders in

Health Insurance companies
Health Insurance Branches in Total
Sl.No. company
Urban Areas Rural Areas
1 Public Sector Health 348 107 455
Insurance companies
2 Private Sector Health 121 74 195
Insurance companies
Total 469 181 650
73
Figures in parentheses are the responded customers.
1.7.5 Data Source
Primary data was collected from Health insurance customers in Erode district with
help of structured questionnaire.
Secondary data were collected from the records maintained in the collector office
of Erode district and records and reports of Health Insurance companies.
1.7.6 Instrument Construction
Instrument was constructed using previous literature. The instrument was validated
by conducting discussion with customers in Health Insurance Companies. The structured
non disguised questionnaire was framed and then it was reviewed by faculty members
specialized in marketing. A pilot study was conducted with a small sample of 50 health
insurance policy holders. Then the reliability of the questionnaire was assessed using
cronbach alpha coefficient. Since alpha value is 0.865 the questionnaire is reliable.
A draft questionnaire was developed and pre-tested using a small convenient

sample to check for any vagueness, gaps and communication errors. Field tests on the
revised questionnaire were then conducted with a small sample. Subjects were guided
through the question. The final version of the survey consisted of a number of measures to
attitude, perception and satisfaction towards regarding Health insurance companies,
employing five-point rating scales (1 = strongly agree and 5 = strongly disagree).
1.8 FRAMEWORK OF ANALYSIS
The tools used for analysing the data collected were:
1.8.1 Descriptive Analysis

Descriptive analysis is an important tool used to assess the distribution of
respondents in each category. As it is expressed in percentage, it facilitates comparison.
This analysis is carried out for policyholders of health insurance and suitable tables were
also drawn to facilitate the understanding of the readers.
1.8.2. Chi Square Test
74
In order to examine the relation between the degree of consultation and profile
variables, the Chi-Square Test of the following formula was applied:
(O E ) 2
Chi Square = with (c 1)( r 1) degrees of freedom.
E
RowTotalXColumnTotal
where, E
GrandTotal
O = Observed Frequency,
E = Expected Frequency,
r = Number of Rows,
c = Number of Columns
In the present study, the 'chi-square test has been administered to find out the
significant association among the demographic profile of respondents and the perception,
attitude and satisfaction towards the health insurance.
1.8.3 Analysis of Variance (ANOVA)
Analysis of variance is used for examining the differences in the mean values of the
dependent variable associated with the effect of the controlled independent variables, after
taking into account the influence of the uncontrolled independent variables. One-way
analysis of variance involves only one dependent variable or a single factor. The null
hypothesis may be tested by the F statistic based on the ratio between these two estimates:
SSx / (c -1) MSx

F=
SSerror / (N - c) MSerror
c
Where SSx n (Y j Y )2
j 1
c n
Where SSerror (Y j Y )2
j 1 i 1
Yi = Individual observation
Yj = Mean for category (j)
Y = Mean over the whole sample, or grand mean
Yij = ith observation in the jth category
75
C = Number of independent variables or groups
N = Total sample size (nxc)
The F statistic follows the F distribution, with (c-1) and (N-c) degree of freedom.
In the study the one-way analysis of variance has been administered to find out the
association between the demography profiles and their opinions about health insurance
companies, overall attitudes and overall satisfaction level of customers of health insurance
companies.
1.8.4. Correlation Coefficient
The most familiar measure of dependence between two quantities is the Pearson
product-moment correlation coefficient, or "Pearson's correlation." It is obtained by
dividing the covariance of the two variables by the product of their standard deviations.
Karl Pearson developed the coefficient from a similar but slightly different idea by Francis
Galton.[4]
The population correlation coefficient X,Y between two random variablesX and Y
with expected valuesX and Y and standard deviationsX and Y is defined as:
whereE is the expected value operator, cov means covariance, and, corr a widely used
alternative notation for Pearson's correlation.
where x and y are the sample means of X and Y, and sx and sy are the sample
standard deviations of X and Y.
This can also be written as:
76
If x and y are results of measurements that contain measurement error, the realistic
limits on the correlation coefficient are not 1 to +1 but a smaller range.In this study
Correlation tool is administered to analyze the relationship between customer attitude,
deficiencies, switchover, customer satisfaction, perception, expectation and purchase
intention.
1.8.5. T-test
The t test in the present study is conducted to find out the significant difference
among the two group means. Before that the homogeneity test has been conducted to test
whether the groups are homogenous or not (Balazas, 1995).
x1 x 2
t with degree of freedom = (n1+n2-2)
(n 1 - 1) s (n 2 - 1) s
2 2
1 1
1 2

n1 n2 2 n1 n2
Whereas
t t-statistics
X 1 Mean of the first sample
X 2 Mean of the second sample
s12 Variance in the first sample
s 22 Variance in the second sample
n1 Number of samples in first groups
n 2 Number of samples in second groups
In the present study, the t test has been administered to find out the significant
difference among the gender, marital status and perception, attitude and satisfaction
towards health insurance.
77
1.8.6 Factor Analysis
Factor analysis identifies common dimensions of factors from the observed

variables that link together the seemingly unrelated variables and provides insight into the
underlying structure of the data. Varimax rotation is one of the most popular methods used
in the study to simplify the factor structure by maximizing the variance of a column of the
pattern matrix. The common factors themselves are expressed as linear combinations of
the observed variables. (Nalini, 2006).
Factor Model
Family income = Wii X1 + Wr2 X2 + . . . .+WikXk
Whereas
Fi = Estimate of the ith factor
Wi = Weight or factor score co-efficient
Xi = Variables included
k = No. of variables included
In the present study factor analysis tool has been employed to reduce the number of
variables related to attitudes of customers towards health insurance and deficiency in
health insurance companies services provided to their customers into factors.
1.8.7 GAP Analysis
The gap analysis was carried out through mean values of expected and perceived
services provided by the health insurance companies, to see whether there exists significant
difference between the opinion of customers on the various services and issues related to
health insurance.
1.8.8 Multiple Regression Analysis
When a variable is dependent on more than one independent variable, one analysis
will not reveal the relationship. For this purpose, the multiple regression analyses were
administered. The cause and effect relationship between dependent and independent
variables has been carried out by multiple regression analyses. The general form of the
regression model is:
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Y = a + b1 X1 + b2 X2 + . . . +bnXn + e
Whereas
Y = Dependent variable
X1, X2. . .Xn = Independent variable
b1, b2. . bn = Regression co-efficient of independent variables
a = Constant and
e = error term
1.8.9 Structural Equation Modelling (SEM)

Structural equation modelling was used to test the hypothesized model by applying
LISREL 8.3 (Joreskog and Sorbon, 1993) to covariance matrix. It is used to measure the
direct and indirect effect of perception, attitude, purchase intention and expectation of
policy holders on customer satisfaction towards health insurance. By the result of SEM, the
t statistics of the path coefficients have been examined to indicate the direct and indirect
effect of independent variables on dependent variable directly and also through mediating
variable (Anderson and Gerbing, 1988).
1.9LIMITATION OF THE STUDY
The study is subjected to the following limitations.
1. The scope of the study is confined to Erode district only. The result cannot be
generalised to the total health insurance industry in India.
2. Purposive sampling was used to select the sample respondents, as random sampling
could not be used due to non-availability of population details.
3. The variables related to economic, social and psychological characteristics were
drawn from the review of previous studies and the views of experts in the related
area.
4. The descriptive variables related to so many aspects of customer attitudes and
perception had been measured with the help of five point scale.
1.10 CHAPTERISATION
The present study has been organized into six chapters for the purpose of clear and
neat presentation.
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Chapter-I :This chapter describes the introduction of Health insurance policy, the
need for the study, statement of the problem, objectives of the study, scope and limitations
of the study, methodology, sampling design, instrument design, tools of analysis and
chapterization.
Chapter-II: This chapter presents the various previous studies related to this study
and the gap in the research.
Chapter-III: This chapter highlights the history of insurance origin and growth
and trends of health insurance companies in India.
Chapter-IV: This chapter analyze the demographic profile of respondents,

customer perception and attitude towards health insurance policy holders.
Chapter V: This chapter deals with the analysis of the level of customer
satisfaction towards services offered by the health insurance companies. This chapter
describes the process of analysis of data using the various statistical tools and results are
enumerated.
Chapter VI: This chapter provides summary of findings suggestions and

conclusions. The various conclusions arrived at from study and suggestions to improve the
various parameters are included in this section. The scope for future research is also dealt
with in this chapter.
80
REFERENCE
1. Anne L. Balazas (1995), Positioning the Retail Shopping Center for Aging
Customers, Stores, 77(4), April, pp.11-14.
2. Black, W.C. Multivariate Data Analysis Seventh Edition
3. P.S. Grewal, Methods of Statistical Analysis, Sterling Publisher (P) Ltd., New
Delhi, 1990, pp.1094-1096.
4. Joreskog, K and Sorbon, D., (1993) LISREL 8: Structural Equation Modeling with
the SIMPLIS Command Language, Scientific Software International, Chicago, IC.
5. Anderson, J.C and Gerbing, D.W (1988), Structural Equation Modeling in

Practice: A Review and Recommend TwoStep Approach, Psychological
Bulletin, 103(3), pp. 411-423.
6. Tripathi, (2005), A textbook of Research Methodology in Social Sciences, 5th
edition, Sultan Chand and Sons, New Delhi.
81
CHAPTER - II
REVIEW OF LITERATURE AND GAP ANALYSIS
2.1 INTRODUCTION
Health sector is one of the crucial sectors in any economy and many researchers
focus on this. There are various studies which were conducted on the different aspects of
Health Services and related areas. The present study examines the health insurance market
in India with specific focus on the insurers, hospitals and their inter linkages. The review
of literature is an important part of studies in order to identify the gaps that exist in
research.
2.2 REVIEW OF LITERATURE
Houston and Simon (1970)1 conducted a cross sectional study of relation between
the average costs and premium receipts of life insurance companies, as a means of
investigating economies of scale. Further, average cost functions for the life insurance
industry, which show increasing and then constant returns, are estimated from cross
section data for 237 companies of U.S. The special problems of measuring output,
controlling product mix, and accounting for the effect of rate of growth in output are
examined and dealt with. The study concluded that average costs were constant beyond
$100 million of premium amount.
Charnes, Cooper and Rhodes (1978)2 provided a nonlinear programming model,
which has given a new definition to the measurement of efficiency. In other words, it has
provided with a scalar measure of efficiency, which can objectively determine the weights
with reference to observational data for multi-input as well as multi-output. The dual
aspects of this programming model pave the new way for estimating external relations
from the observational data. Connections between engineering and economic approaches
to efficiency are delineated along with the new interpretations and ways of using them in
evaluating and controlling managerial behavior in public programs.
Praetz (1980)3 examined the average cost relationship between life insurers and
each of ten main insurer characteristics. The data used were mainly drawn from 90 insurers
with more than half of the life insurance in force in U.S. The study revealed that the
following independent variables were significant in producing economies of scale in life
insurance business premium income new business ratio; proportion of whole life business;
and size of insurer (i.e., giant mutual insurers).
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Doherty (1981)4 analyzed the conceptual and econometric problems arising from
the use of premium income as a proxy for output, while making estimation of various
efficiencies. The study suggested that output measure is not independent of the firm's
pricing policy and its use implies potentially serious problems of simultaneous equation
bias and errors in variables. Moreover, the study concluded that a delivery-based output
measure was theoretically much superior and will encounter less severe econometric
problems.
Weiss (1986)5 examined that productivity improvement is critical factor for all the
firms facing increasing competition such as life insurers, because the output consists of
services that are not directly observable. The purpose of this study was to develop and
illustrate a method for measuring productivity for life insurers, with the main emphasis on
developing new techniques for measuring output and used in computing divisia and exact
indexes of total factor productivity for two sample insurers-one for stock and another for
mutual insurer-over five year intervals. The study concluded that applicability of the output
and productivity measurement methodologies developed was not limited to the specific
insurers studied, but rather could be used as a guide in measuring the productivity of any
life insurer or the life insurance industry in general.
Grace and Timme (1992)6 analyzed the U.S. life insurance industry with the
sample of 423 life insurers and estimated that the overall and product specific scale
economies as well as pair-wise costs were complementarities for a wide variety of
products. Estimates of these costs characteristics were provided for numerous output
vectors, since theory suggested that the magnitude of scale economies and cost
complementarities may vary with the scale and mix of outputs. In contrast, previous
studies provided only a single point estimate of industry cost characteristics using the
sample mean output vector. Therefore, the study provided with a more complete
representation of the industry's cost characteristics and, in turn, new insights into decisions
related to the optimal scale and mix of outputs.
Rama and Baru (1994)7 examined the structure of health care provision existed in
public private; and voluntary sectors and utilization patterns for both inpatient and
outpatients care across states. For this were obtained from the World Banks Country
Report on India, India: health sector financing-coping with adjustment; opportunities for
reforms and World Development Report 1993. The study showed the presence of much
variation in the availability of non-government health services across states. In most of the
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states, public sector was the main source of provider of curative services and private and
voluntary sector marked by uneven spread and regional variations. However, there were
some states in which private and voluntary sector were achieving the significant growth
and supplementing the public services. However, it was suggested that the private and
voluntary sector should move only to those areas, where they could show better results and
get profit. Moreover, majority of socio economic groups depend on public provisions.
Therefore the cut back of public services would result in disparities of access between
rural-urban, advanced-backward areas and across classes.
Purohit and Siddiqui (1994)8 examined the utilization of health services in India
by making the comparison of Indian states in terms of low, medium and high household
expenditure on the health care, public and private facilities across the state. For this, data
obtained from NSSO 1992 (extends over 8346 villages in rural areas and 4568 blocks in
urban areas) and NCAER1992 (extends over 1061 villages in rural areas and 1873 blocks
in urban areas). The study concluded that there was growing popularity of indigenous non
allopathic system, increasing involvement of private sector in expensive tertiary care,
existence of regional disparities in health service utilization among different expenditure
groups of states and these disparities in urban and rural areas tended to continue.
Moreover, there was no serious government initiative to encourage utilization of health
services by means of devising health insurance and other cost recovery mechanism.
Therefore, the study suggested the dire need to consider carefully into some of aspects
most important of which were that policy guideline should be implemented in a
satisfactory manner.
Cummins, Turchetti and Weiss (1996)9 provided benchmark statistics to facilitate
the comparisons of efficiency and productivity under the new European regulatory regime,
when data on more recent periods became available. In addition, the production frontier
results were used to test hypotheses about two major issues in industrial organization: the
coexistence of alternative product distribution systems and organizational form in an
industry. The results indicated that technical efficiency in the Italian insurance industry
ranged from 70 to 78 percent during the sample period. There was almost no efficiency
change over the sample period, i.e., on average Italian insurers operated at about the same
distance from the production frontier throughout the sample period. However, productivity
declined significantly over the sample period, with a cumulative decline of about 25
percent. The decline was attributable almost exclusively to technological regress, implying
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that insurers needed more inputs to produce their outputs at the end of the sample period
than at the beginning. Although improvements in both technical efficiency and technical
change appear to be needed, the main problem at present appears to be the adverse shift in
the production frontier.
Sanyal (1996)10 ascertained the intensity of use of the government and private
source of treatment by the households and expenditure incurred by them; changes in the
utilization pattern; expenditure; and the differentials across the rich and poor. The study
used the results of three surveys [(conducted by National Sample Survey Organization
(NSSO), National Council of Applied Economic Research (NCAER) and National Institute
of Public Finance and Policy (NIPFP)] on health care expenditure and utilization in order
to elicit information. The results shown that the burden of health care expenditure in rural
areas was twice in 1986-87 as compared to 1963-64 and support the view that avenues for
additional revenue earning lie more in the secondary and tertiary hospitals. Moreover, the
study suggested that some introspection is needed particularly when abnormal increase in
prices of medical care took place, so the Indian health planners would have to pay more
consideration at the data sources resulting in to the interstate differences in household
financing.
Korhonen (1997)11 conducted a study in order to deal with the problem of
searching the efficient frontier in Data Envelopment Analysis (DEA). The basic aim was to
show that the free search approach developed to make a search on the efficient frontier in
multiple objective programming can also be used in DEA. The study recommended the use
of Pareto Race (Korhonen and Wallenius [1988]) for purpose to make a free search on the
efficient frontier due to following reasons: as in Pareto Race, the Decision Maker (DM)
may simply control the search with some function keys; the information is displayed to the
DM as bar graphs and in numeric form; the search can be terminated at any time, the DM
wishes.
Fukuyama (1997)12 investigated the productive efficiency and productive changes
of Japanese life insurance companies with primarily focus upon the ownership structure
and economic conditions. The results of the study revealed that mutual and stock
companies possessed identical technologies, but the productive efficiency and productive
performance change from time to time across the stock and mutual under different
economic conditions.
85
Cummins and Zi (1998)13 conducted a comparative analysis of frontier cost
efficiency methodologies with the application of wide range of econometric and
mathematical programming techniques to a data set consisting of 445 life insurers over the
period 1988-1992. The study provided that alternative methodologies give significantly
different estimates of efficiency for the insurers. Moreover, the efficiency rankings are
quite well-preserved among the econometric methodologies; but the rank correlations are
lower between the econometric and mathematical programming categories and between
alternative mathematical programming methodologies. Therefore the results provided with
the fact that the choice of methodology have significant effect on the measurement of
efficiency.
Brockett et al. (1998)14 examined the efficiency effects of different forms of
ownership (stock versus mutual) and types of marketing system (agency versus direct) for
the property-liability insurance industry of US. Data envelopment analysis (DEA) results
were obtained from the recently developed RAM (Range Adjusted Measure) model and
then extended for comparison with studies by others. Using agency theory (and like
approaches) the study assumed that the operations occurred only on the efficient frontier.
The need for that assumption is obviated by using operations provided by DEA to project
all observations on their efficient frontiers. A use of (non-parametric) rank-order statistics
then produced and provided with results which differ from these other studies. Therefore
the results provided that application of different measures provided with the different
estimate of efficiency.
Long and Marquis (1999)15 examined the trends in job based health insurance
during 1993-1997. For this, they compared estimates of National Employers Health
Insurance survey and Robert Wood Johnson Foundation (RWJF) employers health
insurance survey. The study shown that the share of workers enrolled in employers health
plan remained constant, prices also remained stable, whereas share of premium contributed
by employer showed little change over a period and there was no difference in contribution
for health plan between small and large firms. Moreover, the study also found the
existence of overall stability in coverage and concluded that Insurance Market Reforms
and Health Insurance Portability and Accountability Act of 1996 certainly affect the
participation in job-based health insurance.
Bonet (2000)16 analyzed the effect of waiting time in Spanish public health system
on the demand for private health insurance. For these data were gathered from the National
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Health Survey (1993) of Spain, which contain results of 21,120 adults and Spanish Family
Budget survey (1990-91). The study assumed that velocity of delivery was a qualitative
attribute of health care system that is considered while selecting health coverage plan.
Moreover, the Expected Utility Maximization determines whether or not individual buy a
private health insurance and also the waiting time in doctors offices and waiting list for
surgical procedure, income and education level have positive effects on the probability of
buying private health insurance. The study concluded that the worsening quality of public
health care has the effect of shifting consumer towards the private sector and at the same
time with the improvement in public health care has adverse effect on the private sector.
Gumber and kulkarni (2000)17 Undertook a case study in Gujarat with the
objective of determination of burden of health care expenditure; the extent to which health
insurance had helped in mitigating the burden; demand for health insurance; willingness to
pay for it; and to suggest an affordable health insurance plan for workers in informal
sector. To achieve this objective, a primary survey of 1200 households was undertaken in
Ahmedabad district of Gujarat. The study concluded that private sector played a dominant
role in providing services to both urban and rural areas and also there is strong need for
health insurance especially for low income people because of heavy burden of out-of-
pocket expenditure on them. Thereby the study suggested that while seeking health care,
SEWA a type of health insurance scheme having strong preference by those who could
afford to pay and also not access the services of various other schemes.
Sodani P.R (2001)18 investigated the communitys preference on the various aspect
of health insurance. For this data had been collected from a sample of 300 households of
Jaipur, Rajasthan. The study provided with the fact that low level of awareness existed
about health insurance. Beside this, quality of care and cost are two important factors
affecting the communitys decision to subscribe any new health insurance plan. An
integrated provider and insurer system was much preferred as compared to public or
private-based management. Alternatively, hospitalization and maternity services are
preferred among the given choices for benefits to be included under the plan. The study
concluded that there was high level of willingness to join a health insurance plan in future,
if designed carefully for the informal sector i.e. an innovative and feasible health insurance
scheme at low cost for providing quality services to the informal sector of the community.
Cummins and Misas (2001)19 examined and provided new information on the
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effects of deregulation and consolidation in financial service market with the analysis of
Spanish insurance industry. The sample period 1989-1998 studies the introduction of the
European Unions (EU) Third Generation Insurance Directives, which deregulated the EU
insurance market. The study provided that deregulation had led to dramatic change in the
Spanish insurance market; the number of firms declined by 35 percent; and average firm
size increased by 275 percent. The study also analyzed the causes and effects of
consolidation using modern frontier efficiency analysis to estimate cost, technical, and
allocative efficiency, as well as using Malmquist analysis to measure total factor
productivity change. The results showed that many small, inefficient, and financially
under-performing firms were eliminated from the market due to insolvency or liquidation
and those who acquired during merger and acquisition prefer relatively efficient target
firms. As a result, the market experienced significant growth in total factor productivity
over the sample period. Consolidation reduced the number of firms operating with
increasing returns to scale but also increased the number operating with decreasing returns
to scale. Further the study suggested that large firms should focus on improving efficiency
rather than on further growth.
Boonyasai, Grace and Skipper (2002)20 examined that liberalization and
deregulation led to greater competition for the insurer, therefore insurers should become
more efficient. They analyzed the impact of liberalization and deregulation of four life
insurance markets: Korea, Philippines, Taiwan, and Thailand. Using Data Envelopment
Analysis (DEA) to measure cost efficiency, the study found that liberalization and
deregulation of the Korean and Philippine life insurance industries seem to have stimulated
increase and improvement in productivity whereas liberalization of the Taiwanese and
Thai life insurance industries seemed to have had little effect on increase and improvement
in productivity. Finally, the study concluded that liberalization and deregulation together
can promote competition and thereby resulted in more efficiency on the part of insurer.
Moreover, the results of the study are in consonance with the view that, in a restrictive
regulatory environment, welfare gains will be minimal if deregulation does not closely
follow liberalization.
Mahal (2002)21 analyzed whether the regulatory steps in the IRDA bill would
influence the progress towards achieving health policy goals of India or not; and also
described the regulatory structure currently existing in India in relation to health care
provisions, private health insurance and its ability to promote national health policy goals.
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The study concluded that private health insurance was likely to have an impact on equity in
the financing of health care, cost and quality of health care. The private health insurance
might turn out to be more inequitable than social insurance of comparable coverage.
However an informed and well defined, regulated and implemented insurance regime will
ameliorate the bad outcomes of private health insurance. Not only the insurance
regulations, but the regulation relating to benefit packages, restriction on risk selection and
consumers protection would be equally useful. At the same time there is need for
improved enforcement of regulatory regimes and better coordination between the IRDA
and other Regulatory Bodies. New legislation may also be required in improving standards
in health care provision.
Fronstin (2002)22 examined the state of employment based health benefits among
workers in U.S and how it has changed since 1993. For this purpose, the data was obtained
from Current Population Survey (CPS) and workers were asked questions about health
benefits in the work place. The study findings provided that the percentage of workers
offered health benefits has been rising, percentage of workers with health benefits through
their own employer has also increased, but the fewer workers were taking health benefits
when they were offered because they were getting health insurance through other sources.
This expansion in employer coverage (health benefits) began in Mid-1990 and continued
into early 2001. No doubt, during this period cost of providing health benefits to the
workers has been rising, but we may continue to see more workers with these benefits, if
the economy strengthens.
Gupta (2002)23 conducted a study in Delhi, which is different from other because it
has looked at a kind of formal insurance that is likely to come to India with privatization.
The main objective was to analyze whether individuals and households would be willing to
participate in private health insurance schemes. For this purpose, a survey of 504
households of Delhi was conducted. The study showed high level of willingness to
participate in insurance programme was mainly from low income individuals because the
middle and high income households have already some form of insurance. The biggest
deterrent would be prior coverage and most of the households willing to opt for standalone
health insurance schemes. The study concluded that majority of population is either
uninsured or underinsured and the introduction of private health insurance would definitely
be a welcome change, if it could bring the uninsured and underinsured under its fold.
Cummins, Weiss and Zi (2003)24 investigated the economies of scope in the
89
insurance industry of US, over the period 1993-1997 by using two primary hypotheses
the conglomeration hypothesis, which holds that operating with diversity of business can
add value by exploiting cost and revenue scope economies; the strategic focus hypothesis,
which holds that firms can best add value by focusing on core businesses and core
competencies. The study also attempted to analyze, whether it was advantageous for firms
to offer both life-health and property-liability insurance or to specialize in one of the major
industry segments. The Data Envelopment Analysis (DEA) was applied because of an
innovative feature of the estimation of cross-frontier efficiency, where each group of firms
(diversified firms and specialists) was compared to a reference set consisting of the other
type of firm, enabling us to determine whether the specialization or conglomeration was
the dominant strategy for each firm in the sample. The results provided only weak
evidence for the existence of economies of scope in the U.S. insurance industry. Although
diversified firms dominate specialists in the production of diversified firm output vectors
in terms of revenue efficiency for both life-health and property-liability insurance,
specialist firms dominate diversified firms for the production of specialist output vectors in
revenue efficiency and also dominate diversified firms in cost efficiency for property-
liability output vectors. The study concluded that in general, strategic focus appears to be a
better strategy than conglomeration.
Martin (2003)25 evaluated the performance of Zaragoza Universitys Departments
(Spain) including the existence of differences in the strength and weakness between
departments of various areas. The study uses the Data Envelopment Analysis (DEA) to
obtain an overall performance measure through the comparison of a group of decisions
units. The result of the study revealed those departments in comparison to other who carry
out their activities efficiently and effectively.
Mahal (2003)26 accessed the potential impact of the entry of private players in the
health insurance market on the size of insurance market and on the distribution of public
health subsidies on health care provision in India. For this, data was obtained from number
of previous published studies as well as information on medical care and expenditure from
survey undertaken by Indias National Sample Survey Organization (NSSO 1995-96),
(NSSO1998) was used. For the purpose of analysis, a simple analytical model as well as
simulation model was used to assess the impact of such entry. Simulation results presented
in the paper suggested that redistributive effect is small, when richer group have privileged
access to public facilities. Further, the analysis suggested that with the relaxing entry
90
conditions the health insurance market will likely to be much larger than the existing
business of General Insurance Corporation of India and this increased size have many
equity-enhancing effects that include reduced use of public sector hospitalization facilities
by the upper income group.
Watts et al. (2003)27 investigated how public employers made health benefit
decisions for their employees and how they altered their decision in response to rising
premiums in U.S. The study explored the changes in contribution strategies of state and
local government employers, the extent of premium cost shifting to employees and other
means used to reduce the impact of rising premiums on public budgets and compare these
changes with those of private employers. The study was based on Community Tracking
Study (CTS), conducted in 12 US communities during 2000-01 and survey conducted by
Robert Wood Johnson Foundation (RWJF) in 1997. The results of the study provided that
public employers were providing health insurance coverage to nearly 16% of all workers
of U.S. Their reaction to rapidly rising premiums can have important effect on local market
for health insurance, because of their size, visibility and reflection of public policy. The
study concluded that public employers were bound by the tight budget set by elected
officials and statues regarding due process, public input and public accountability.
Moreover, the public employer faced tough choice regarding employee benefits due to
consolidation in insurance market as well as continuous increase in premiums.
Ekman (2004)28 assessed the evidence of the extent to which a Community-Based
Health Insurance (CBHI) was a viable option for health care financing; for mobilization of
resources; and for the extension of financial protection in low income countries. The
approaches taken for this includes: review of 36 separate studies, of these 15 are published
articles in peer reviewed journals and 21 are unpublished papers and reports. The review
contributed the strong evidence that CBHI provided some financial protection by reducing
out-of-pocket spending and improved cost of recovery. On the other hand, there is weak or
no evidence that schemes had no effect on quality of care. The study found that the effect
was small and schemes serve only a limited section of population. But the CBHI are, at
best, complementary to other more effective system of heath financing. Moreover, it was
suggested that for improvement of reliability and validity of evidence, the analysts should
agree on a more coherent set of outcome indicator; and policymakers need to be better
informed as to both cost and benefits associated with implementing various financing
options.
91
Ahuja (2004)29 examined the more suited arrangement for providing health
insurance to poor people in India and also explored how the reforms in insurance sector
alter health insurance prospects facing the poor in developing countries and what changes
had happened or likely to happen as a result of insurance sector reforms. In developing
countries, community based arrangement was more suited for providing health insurance
to low income people. Insurance sector reforms led to development of private health
insurance, at the same time reforms can affect the low income people through its effect on
the provision and financing of health care services. The study concluded in India, CBHI
will play an important role, but there is need to be encouraged by governments
interventions in order to guide and direct health insurance market, so as to minimize the
cost escalation of health care provision.
Nayar, Kyobutungi and Razum (2004)30 attempted to discuss the historical
background, scope as well as limitation of Self Help Movement in the Europe, where it
was originated and analyzed its experience in Bangladesh and India and draw conclusion
regarding the relevance of Self Help Groups for improving health of population. The study
shown in Europe SHGs originated because of dissatisfaction with depersonalized health
care, where as in South Asia it provided by NGOs and government. SHGs can help to
achieve some degree of synergy between health care providers and users but cant
prescribe to replace the government health services in low income countries. Moreover,
SHGs are suitable for individualistic societies with developed health care system and less
suitable for hierarchical societies with unmet demand for regulated health care.
Devadasan et al. (2004)31 conducted study on Indian community health insurance
schemes; context in which they are operational; their design and management;
administrative challenges faced by them; and their impact. Earliest scheme started in
Kolkata in 1952. Currently, in India more than 20 CBI schemes are operating, but the
study based on 12 such schemes. The study reflected that there are three basic designs of
CBI schemes depending upon the insurer, in most of schemes enrollment is individual and
membership is voluntary. The main barrier in development of CBI schemes is to find an
appropriate provider and financial sustainability. So the government should come forward
to subsidies this equitable health financing mechanism. Therefore, CBHI in India offer
valuable lesson for the policy makers and practitioners in the field of health care.
Bennett (2004)32 conducted a study with a view to setting out preliminary
conceptual framework for examining interaction between Community-Based Health
92
Insurance (CBHI) schemes and other aspects of health care financing system. In order to
explore implication of interaction, this paper; (1) set out a series of conceptual maps that
illustrate how CBHI schemes may relate to the broader health care financing system. (2)
Uses the maps to explore how CBHI schemes may (or may not) contribute to national
policy objectives, and how different feature of CBHI schemes and government policy may
interact to affect achievement of policy objectives. The utility of broader approach to
analyze CBHI schemes is illustrated through examination of two policy issues, namely (1)
coordination of CBHI risk pools and government risk pools, and (2) equity implications of
CBHI schemes and the role of government subsidies in such schemes. The study
concluded that there is a strong need for empirical work to explore how CBHI schemes and
broader health care financing system interact, and that even if individual schemes achieve
their own objectives (in terms of equity, efficiency etc.), this does not necessarily imply
that such objectives will be achieved at the system level.
Jajoo and Bhan (2004)33 described the social upliftment of villagers in the
Sevagram region of Maharashtra, where Jowar micro health insurance scheme was first
introduced to ensure uniform health care to the poor and needy people in the Nagpur
village. The study initiated by Medico Friend Circle Student Group that Jajoo started in
Sevagram, when he joined as faculty in Medical College Nagpur. The scheme began in
1979, with focus on curative care, later on included preventive and promotive care. Its
wide acceptance in the Nagpur village leads the team to extend it to other villages. Because
of increasing acceptance among more villages, the scheme extended to cover Income
Generation Programme and Womens Self Help Groups. Thereafter, it extended to action-
oriented individuals. The intention behind the introduction of Jowar Health insurance
scheme at sevagram was to identify revered individuals, to empower them by bringing
together, cultivate a sense of decision making by consensus and initiate act of common
faith.
Gupta, Roy and Trivedi (2004)34 examined the role of TPAs and the issues that
required to be taken into consideration while evaluating their usefulness and functioning in
India. The study based on a series of meetings, discussions and interviews with various
TPAs, insurance companies and providers. No doubt, the TPAs face different barriers in
terms of capital, capacity and connections but still they are providing cashless transaction
at the time of service delivery to the customers. The IRDA and Health Ministry should
come together so as to ensure TPAs which in turn will ensure active role of the TPAs in
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Community and Universal Health Insurance Schemes. Moreover, the study concluded that
TPAs can play an important role in making insured health care availability smoother, but
neither can it be seen as a panacea for all the problems, nor it can be blamed for these
problems of health sector. The TPAs system should be regulated and checked in order to
take care of consumers interest.
Bhat and Babu (2004)35 discussed the role, importance, functioning of TPAs in
health insurance market; analyzed the existing TPA system; IRDA regulation on TPAs and
its implications; examined the issues and challenges TPAs face in an unregulated health
sector; and analyzed the prospects of intermediaries in insurance sector. The study
concluded that introduction of IRDA has paved the way for (TPAs) Third Party
Administrators who are playing the role of insurance intermediaries in setting up of
managed health care systems. The objective behind setting up of TPAs was to ensure better
services to policy holders and to mitigate the negative consequences of private health
insurance. However the TPAs face immense challenges in the health sector because of
demand and supply side complexities of private health insurance and health care market.
IRDA has defined the role of TPAs as insurance intermediary in the management of claims
and reimbursement, but at the same time their role is not well defined in controlling the
cost of health care and ensuring appropriate quality of care.
Matthies and Cahill (2004)36 observed how India can break barriers to expand
health insurance, as several developed and developing nation have already done. It state
health insurance involving a mix of health insurance company management and risk
taking, state government, industrial contributions and local NGOs administration, would
gradually encompasses most of the rural poor. The study shown a level playing field with
adequate consumer protection created through the legal regulatory framework is necessary,
but not sufficient to promote the development of health insurance market. Alternatively,
health insurance claim tends to be more frequent, smoother and predictable, so that the
insurance companies could reflect this. Moreover, the absences of a substantial and
accurate data base addressing morbidity, mortality, beneficiary and claim related
information is especially handicapping the development of health insurance. But the India
can develop and expand its health insurance market through the right policies and stringent
regulations and this would bring quality care for teeming millions of people at a reasonable
cost.
Asgary et al. (2004)37 estimated the Demand and Willingness to Pay (WTP) for
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health insurance by rural households in Iran and, to understand the factors that contribute
to households WTP for health insurance. A Contingent Valuation Model (CVM) was
applied and data has been collected from a sample of 2,139 households. The finding of the
study provided that a significant percentage of population (more than 38%) live in rural
areas, but the health care insurance currently operating in urban areas. The WTP is less
than average premium currently set in urban areas, only if the price of insurance is set a
minimum level, would most of the households be willing to buy it. In order to provide
rural areas with same level of protection as urban areas, the difference would have to be
subsidized and the policymakers would need to consider this difference in WTP in
different region of the country in policy formulation. The will result in rural development
which in turn leads to increase in rural households WTP for health insurance.
Sekhri and Savedoff (2004)38 examined the private health insurance coverage
around the world and how its wide spread has become and intended to encourage
policymakers to pay attention to private coverage and the role it can and does, play in
health care system. For this purpose, the data was obtained from National Health Accounts
(NHAs) regarding private health insurance. The study shown that private health insurance
is significant in countries with widely different income levels and health system
infrastructure. The main challenge is to choose how to use it wisely. Further the study
suggested that policymakers should regulate the private health insurance sector
appropriately so that it could serve the objective of coverage in universe and equity.
Ahuja and De (2004)39 confirmed that the demand for insurance is limited where
supplies of health services is weak and also explained the interstate variation in demand for
health insurance by poor in relation to variation in healthcare infrastructure. For this
purpose, data was collected from General Insurance Public Sector Association (GIPSA)
and National Sample Survey Organization (NSSO) 55th round. The data analysis was done
by using Regression analysis and shown that healthcare infrastructure is positively related
to demand for health insurance by poor, whereas the proportion of Below Poverty Line
(BPL) population is negatively related. Further, the study suggested that, in order to build
demand for health insurance it is necessary to address demand side more seriously and at
the same time, the design insurance schemes by taking into consideration the paying
capacity of the poor.
Mudgal, Sarkar, and Sharma (2005)40 examined whether consumption
expenditure of households in rural India is insured against medical ailments. For this
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purpose, data was obtained from the 52nd round of National Sample Survey (NSS) as well
as primary survey was conducted, which involved 70725 households from 7253 villages in
77 regions. The study shown that with the exception of few regions and certain section of
scheduled tribes households, villagers in India are able insures their consumption against
medical ailment shocks. But the villagers are not perfectly able to share the risk of all
shocks. So, the study was unable to conclude whether they perfectly share health risk or
not and also it does not mean that the possibility of health insurance existing in the rural
India is indeed high. Further, careful village level studies could be conducted to test the
robustness of this possibility.
Ahuja and Narang (2005)41 provided an overview of existing forms and emerging
trends in health insurance for low income segment in India with focus on both the demand
and supply side factors promoting this development, and provided that three conditions
essential for extending health insurance to low income segment. Further based on the
efforts of the central government by way of its Universal Health Insurance (UHI) schemes
as well as on the three insurance pilots of United Nation Development Programme
(UNDP), some designs of health insurance for low income groups were drawn. The study
concluded that these schemes have considerable scope of improvement for a country like
India by providing appropriate incentives and bringing these under the regulatory ambit.
Currently public health services are weak and inefficient, private and voluntary health care
is unregulated and scattered. The study suggested that in order to develop health insurance
for poor in a big way, health care provisions need to be strengthened and streamlined as
well as coordination among multiple agencies is needed.
Acharya and Ranson (2005)42 conducted a study to determine the burden of
health care expenditure on poor; working of CBHI; how CBHI differ from standard health
insurance; and role of state, market and NGOs in health sector of Gujarat. The study was
based on four NGOs that are running health insurance schemes in Gujarat. For this data
obtained from focus group discussion with schemes managers, researchers, and
representative of funding agencies, executives of public and private companies and
members of targeted communities. The study showed that although the schemes were
diverse in respect of their design and management, yet similar in terms of prepayment
mechanism. Moreover, these are so far reached to very small segment of poor and
government of Gujarat have very limited interaction with CBHI schemes operating in state.
The study suggested that in order to improve coverage and to bring better results it is
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necessary to link these schemes with other structures like Self Help Group (SHGs),
Panchayati Raj Institutions (PRIs), Gram Sabhas (GSs), large NGOs etc.
Gupta and Trivedi (2005)43 examined the concept of social health insurance; the
form in which it currently exists in India; the issues and constraints in development of
social health insurance; and innovations in existing social health insurance in context of
other forms of health insurance. In India, there is only one scheme that qualifies as social
health insurance- Employee State Insurance Scheme (ESIS). The study concluded that in
spite of government efforts on health policy, the health sector is currently changing shape
mostly due to market forces and in such a situation the policy makers need to act
immediately in order to provide greater health coverage. The health system in India is
gradually ripe for moving towards coverage for all which meets the main objective to
great extent health for all. The study recommended that the followings steps will scale
up SHI over next two-three years: - setting up of separate social health insurance
organizations, which have at least three divisions one each for the organized sector,
unorganized sector and for the remaining population etc. and government will have to
these organizations.
Bhat, Maheshwari and Saha (2005)44 ascertained the experiences and challenges
faced by hospitals and policyholders in availing the services of TPA in Ahmadabad,
Gujarat. For this 110 hospitals and policyholders were selected by random sampling
method, out of which 72 hospitals and 85 policyholders were found suitable for analysis.
The study shown that only a small percentages of respondents have knowledge about
existence of TPA, there was substantial delay in settlement of claims between TPAs and
health care providers, administrators of hospital perceive burden in terms of efforts and
expenditure after the introduction of TPA. The study concluded there was no mechanism
to appraise the performance of TPAs and regulatory body need to focus attention on
developing mechanism, in order to strengthen the TPAs so as to ensure smooth delivery of
TPAs services in the emerging health insurance market.
Chang (2006)45 conducted a study on solvency and continuous growth of insurance
companies and provided that both depend on their performance. For this a data set
consisted of 20 insurance companies in Taiwan were used. Beside this, an effort was made
to calculate separately 19 items of financial ratio into five operation indicators, which can
be used as performance evaluation variables of insurance companies. These five indicators
are: Capital Structure; Profitability; Solvency; Management Efficiency; and Capital
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Operational Capability. The results of the study indicated that overall performance of
insurance companies were significant in the short run during the period 2000-2002 and
concluded that both return on assets and sign of profitability influence a heavier financial
ratio as well as operating index on performance.
Sinha et al. (2006)46 examined the various barriers faced in accessing scheme
benefits by the members of Community-Based Health Insurance Schemes (CBHIs) run by
Self-Employed Womens Association (SEWA) in Gujarat, India. To satisfy the objective,
the qualitative researches carried out that include four village-level Focus Group
Discussions (FGDs) with members of VIMO SEWA and two district level FGDs with
grassroots level workers (aagewans). The study found that members face a variety of
different barriers, particularly in seeking hospitalization and in submitting insurance
claims. Some of the barriers were outside the schemes control, such as illiteracy and
financial poverty amongst members, and inadequacies of the transportation and health care
infrastructure. But the other barriers relate to schemes design and management such as,
lack of clarity among scheme staff regarding the schemes rules, processes, and
requirements that claimants submit document to prove the validity of their claims. In order
to overcome these barriers the study strongly recommended for: - institutional linkage with
providers; intensified contact with scheme members; capacity-building; and supportive
supervision of aagewans.
Marquis et al. (2006)47 conducted a study on consumers decision making in an
individual health insurance market in California. The study based upon data obtained from
Current Population Survey (CPS1996-2002). Beside this, the primary survey with a sample
of 3964 subscribers in individual and family health plans enrolled during 1996-2003 was
conducted. The study shown that the tax credits and subsidies have modest effect on
number of uninsured people and consumers choice modestly affected by changes in
benefits design, non-price barriers etc. The cost of obtaining information plays an
important role in the low rate of participation. Further, it was also found that there was
substantial pooling in the individuals health insurance market, which increases over a time
because who become sick can continue coverage without new underwriting. Moreover, it
will be easier to attract healthy subscriber than high risk subscribers to high-deductible
policies.
Dror (2006)48 laid seven myths regarding health insurance and examined the
realities behind each of these myths. For this purpose, data were obtained from survey
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conducted in seven locations and sample of 4931 households was selected. The evidence
shown that most people are willing to pay 1.35% of income or more for health insurance,
each consultation to doctor is not very costly, larger households have fewer illness, higher
income associated with more reported illness episodes, a decision tool called Choosing
Health Plan All Together (CHAT) was used in selection of health insurance benefit
package, because the health care needs of the poor are not uniform and the premium that
the poor are willing and able to pay represent significant part of cost of insurance; but they
cant afford reinsurance premium. No, doubt that there is a solvent market for health
insurance among Indias poor. However tapping of market is contingent upon
understanding the customers needs and wants.
Ramani and Mavalankar (2006)49 examined the health system in India and shown
that health and socio economic development are so closely related that it is impossible to
achieve one without other. Beside this, an effort was maintained to examine health system
that should be responsive to community needs, especially for the poor. The study found
that no doubt the economic development in India has been gaining momentum over the last
decade, but the health system is a cross roads today. In India, public health system has
recorded some success over time because of government initiative, but still India health
system is ranked 118 among 191 WHO members countries on overall health performance.
The study concluded by identifying the role and responsibilities of various stakeholders for
building efficient and effective health system and also state that health is priority goal in its
own right, as well as a central input in to economic development and poverty reduction.
Ruchismita, Ahmed and Rai (2007)50 highlighted the challenges in financing
health in India and examined the role of health insurance in addressing these challenges.
For promoting health and confronting disease require action across a range of challenges in
the health system, these include improvements in the policy making and stewardship role
of government; better access to human resources, drugs, medical equipment and
consumable; and a greater engagement of both public and private providers of services.
The study concluded that insurance has limited but important role to play in solving some
of the health financing challenges. The study provided with an operational framework for
development of sustainable health insurance model under national rural health mission
which will respond to the contextual need of different states. Moreover, innovative pilots
of partner agent model led micro insurance could give useful insights for designing a
national level programme, led by an apex body could systematically impact the health
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system in the country.
Dror (2007)51 examined why the one-size-fits-all health insurance products are
not suitable to low income persons in India. The study hypothesized that attractive health
insurance must represent an optimum match between clients needs for health care,
demand for health insurance and available supply of health care. To satisfy this objective, a
survey was conducted in 7 locations, include a total of 4931 households, representing a
total of 24042 individuals. The results provided with the evidence of presence of
considerable variability to pay for health insurance, which was because of multiple reasons
like variability in income; frequency of illness among households; quality and proximity of
providers (private, public) in different locations. Alternatively, the results also shown that
aggregated expense of consultations and drugs exceed those of hospitalization in all the
locations. Further, the study concluded that because of multiple variations in clients needs,
the cost of health care, demand and supply of health insurance across locations, there is
dire need to combine a different optimal benefit package for each location, based upon the
context specific parameters relevant in each location.
Danis et al. (2007)52 conducted a study which aims at determination of a plan that
allows people who are inexperienced with health insurance to pick health benefits and
accordingly, they developed a modified version of Choosing Health Plan All Together
[CHAT] decision tool. For this, the experiment was conducted in 17 locations with 302
participants. The study showed that it was possible to create decision tool that allow rural
and poor communities to participate in insurance benefits packages. Moreover, the findings
has also shown that even within a limited premium there is choice of different packages
and the level of premium determines the expectation of coverage by health insurance.
CHAT tool has important influence on group dynamics in selecting health insurance
benefits package and at the same time retaining balance between individual priorities and
collective responsibilities.
Bikker and Leuvensteijn (2008)53 examined the competitive nature of Dutch life
insurance industry by investigating the several factors, which affect the competitive nature
of the market. Beside this, the study attempted to analyze the relationship between the
scale economies and X-inefficiencies, because the severe competition forces the firms to
exploit scale economies and to reduce X-inefficiencies. The results of the study provided
that limited competition exist in Dutch life insurance industry as compared to life
insurance industry of Netherlands and thereby results in availability of less scale
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economies for the firms of Dutch life insurance industry.
Eling and Luhnen (2008)54 analyzed and provided new empirical evidence on
frontier efficiency measurement in the insurance industry. The first part of the study
consist of review of 87 studies and put them into a joint evaluation of efficiency
measurement in the field of insurance, whereas second part of the study involve, a broad
efficiency comparison of 3,555 insurers from 34 countries. Different methodologies,
countries, organizational forms, and company sizes were compared, considering life and
non-life insurers. The study found a steady technical and cost efficiency growth in
international insurance markets from 2002 to 2006, with large differences across countries.
Denmark and Japan have the highest average efficiency, whereas the Philippines were the
least efficient. Furthermore, the analysis provided that mutual were more efficient than
stock companies. Only minor variations were found that too when comparing different
frontier efficiency methodologies (data envelopment analysis, stochastic frontier analysis).
Moreover, the results of the analysis gave us valuable insights into the international
competitiveness of insurers in various countries.
Yuan and Phillips (2008)55 examined the efficiency effect from the possible
economies of scope across two formally separate sectors by estimating multi-product costs,
revenue, and profit functions. To achieve the above stated objective of the study, a unique
dataset that links the U.S. banking and insurance regulatory was constructed. The motive
behind such construction was to identify newly formed domestic assurbanks (insurers
owning banks), bancassurers (banks owning insurers), and all the unique subsidiaries
licensed either as commercial banks, thrifts, or insurance companies. The empirical
evidence of the study suggested that a significant number of cost scope diseconomies;
revenue scope economies; and weak profit scope economies exist in the post-GLB U.S.
integrated banking and insurance sectors. The scope economies were variant among firms,
and certain firm characteristics were the determinants of scope economies.
Kharva (2008)56 observed the purposefulness of cashless hospitalization and initial
hardship associated with its implementation. For this, analysis of VIMO Self Employed
Womens Association, the insurance unit of SEWA was done. Initially the scheme
provides reimbursement after hospitalization but later on provide reimbursement while
they were still in the hospital. The scheme incorporates health insurance as a crucial
programme. Based on the positive experience of scheme in Gujarat in Jan 2006, the
scheme extended in Ahmedabad city and renamed as cashless (CL) hospitalization. In
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Ahmedabad, this method of reimbursement was optional for members for the first year.
However in 2007, it was made mandatory and members were required to go only to one of
selected hospital to use cashless reimbursement system. It showed that cashless system has
reduced the claim processing period as it takes only the number of days the members is
hospitalized while in the normal system, it takes more than that. Thus CL system has been
successful in making is members access low cost quality care a reasonable rates.
Kipp and Snook (2008)57 analyzed the key factors that insurer will need to
consider when developing pricing policies for health insurance products, because they
need some type of data to formulate an approach to pricing new coverage, where no claim
experience exists. This co-pay encourages the policyholders to shop for most cost effective
treatment. The following are the consideration for expanded health benefits which
include:- the diagnoses covered; the procedure covered; the service area of policyholders;
providers fees for services rendered; cost sharing with policyholders; underwriting and risk
assessment process used; and the place where services rendered. The study concluded that
in order to be more successful in the area of health insurance, insurers have to classify the
risk in accordance with the individuals profile and price them accordingly.
Agarwal et al. (2008)58 examined that there is no strong linkage between health
providers and slum communities in Indore city of Madhya Pradesh. For this 539 slum
community were identified and categorized as extremely, moderately and less vulnerable.
By considering the situation of urban poverty in Indore and the available opportunities,
two approaches were suggested: - Demand Supply Linkage Approach (based on the
premise that building social capital, i.e. norms and networks within a community
facilitating collective action, helps improve the demand and supply of health services for
the urban poor) and Ward Coordination Approach (based on encouraging local
stakeholders to function in a coordinated manner to ensure better health service coverage
in underserved slum areas. The findings shown that programme has enhanced utilization of
health services among slum communities of Indore and helped improve immunization
coverage and other maternal and child health indicators. The study concluded that when
adopting similar mechanism in other developing countries, the key is to select mechanism
that will involve and strengthen the capacities of existing local slums level, groups or
network during planning and implementation.
Zhou et al. (2008)59 conducted the study in order to assess the differences in drug
spending among cancer inpatients in China according to social health insurance status and
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to explore the factors that affect drugs costs. For this purpose, a sample of 1977 cancer
inpatients that were discharged between 1 Oct 2005 and 31 Sep 2006 collected out of
which 1631 were found usable for analysis. The sample divided into two groups according
to Social Health Insurance (SHI) status: - with SHI and without SHI. The study found that
majority of respondents did not have social health insurance and it appears to affect drug
spending by cancer inpatients in China. SHI inpatients had higher drug costs then non SHI
in patients had. The study provided with the fact that SHI coverage was positively
associated with higher drug cost and drug spending, whereas differences were attributable
only to differences in insurance coverage.
Joglekar (2008)60 examined the impact of health insurance on catastrophic out-of-
pocket (OOP) health expenditure in India and taken zero percent as threshold level to
define and examined such impact. For this purpose, data was obtain from World Health
Survey (WHS) 2003 conducted in six states of India, which cover 10750 households and
further information on environmental risk factor was also obtained with the help of
individual questionnaire. The results showed that in India, OOP health expenditure by
households account for around 70% of total expenditure on health and resultant reduced
consumption expenditure on other goods and services and push households in to poverty.
Literature defines OOP expenditure as catastrophic if its share in the household budget is
more than some arbitrary threshold limit. But the study argued that any expenditure on
health is catastrophic for household below poverty line as they are unable to attain
sustainable level of consumption. Moreover, the study found that poorer households are
more vulnerable than richer; the extent of OOP health expenditure is lower for households
where they has completed either primary or secondary level of education and health
insurance has been considered as one of the possible instrument to reduce the effect of
large OOP health expenditure.
Vellakkal (2009)61 examined the determinants behind the process of health
insurance by analyzing the behavior of an insurance agents and various preconditions
affecting the rational behavior of an insurance agents, who are facing a tradeoff between
selling health Insurance and other forms of insurance and the implications of such
behavior on adverse selection and equity. The study also discussed the two new concepts-
insurance habit and asymmetric information on health insurance schemes and various
strategies followed by insurance agents for maximizing their incomes. The study based on
the survey conducted with 400 households selected from districts of Kasargod (less
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developed) and Trivandrum (developed) in Kerala, India. It was observed health insurance
schemes are a less profit but high risk oriented business and the income and education have
limited positive impact on demand for health insurance. The study concluded that in India,
incentive system for promoting various form of insurance; low level of awareness among
the general public; rational and dominant role of insurance agents in market results in low
level of health insurance coverage. Therefore, the study concluded that IRDA should
provide more incentives to insurance agents for selling health insurance.
Garg and Karan (2009)62 investigated the differential impact of out-of-pocket
(OOP) expenditure and its components between developed and less developed regions in
India. Further, an attempt was also made to measure poverty at disaggregated rural-urban
and state levels. For this purpose, data on households consumption expenditure which was
collected from 17 major states of India by National Sample Survey Organization (NSSO)
1999-2000 and which include a sample of more than 120000 households (71000 rural and
49000 urban) was used. The results showed that OOP expenditure is about 5% of total
households expenditure (ranging from about 2% in Assam to 7% in Kerala) with higher
proportion in rural areas. Purchase of drug constitutes 70% of total OOP expenditure.
Approximately 32.5 million persons fell below poverty line in 1999-2000 through OOP
payment, showing that overall poverty increases after accounting for OOP payment is
3.2% as earlier rise of 2.2%. Poverty increases much higher in poorer states and rural areas
as compared with affluent states and urban areas, except in case of Maharashtra. The study
suggested that, for better method of capturing drug expenditure in household surveys
special attention to be paid towards expenditure on drugs, especially for the poor and to
reduce OOP expenditure targeted policies could help to prevent almost 60% of poverty.
Jaswal (2010)63 examined the cashless hospitalization which was evolved during
the last decade, as an integral part of health insurance claim offering, making claim under
health insurance policy indeed a customer friendly process. The practice to pay claims
through physical cheques is quite outdated and inefficient; it would benefit all, if newer
methods of payment like electronic fund transfer were to be implemented. Indian medical
industry being unregulated, there are no standard treatment guidelines or uniform Medical
protocols which are followed by medical professionals all over the country, in all hospitals.
Eling and Luhnen (2010)64 conducted a study to provide an overview on frontier
efficiency measurement in the insurance industry. The study conducted was mainly review
based and involves a comprehensive survey of 95 studies with a special emphasis on
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innovations and recent developments. Beside this, the study also involves the review of
different econometric and mathematical programming approaches to efficiency
measurement in insurance and discusses the choice of input and output factors.
Furthermore, it categorized the 95 studies into 10 different areas of application and
discusses selected results. The results of the study provided that there was a broad
consensus with regard to the choice of methodology and input factors, the difference lies in
case of in output measurement. The study concluded that there is significant need for
future research with regard to analysis of organizational forms, market structure and risk
management, especially in the international context.
Ansah et al. (2010)65 evaluated the performance or efficiency of Ghanaian general
insurance companies from the year 2002 to 2007 and also tested the hypotheses relating to
the roles played by dimension and market share in the efficiency of the Ghanaian general
insurance companies. The study provided with the result that Ghanaian general insurers
operated at an average overall efficiency of 68%, technical efficiency of 87% and scale
efficiency of 78%. Besides this, result also provided with the fact that Ghanaian general
insurers with higher dimension and market shares tend to have higher efficiencies;
implying that general insurers could increase their efficiencies by trying to increase among
other things their dimension and market shares.
Abdalelah S. Saaty and Zaid Ahmad Ansari (2011)66 paper attempts to find out
the factors important in developing a suitable marketing strategy for insurance companies
in Saudi Arabia. It investigates the reasons for buying insurance by the current users of
insurance, reasons for not buying insurance by non-users of insurance and the issues and
problems faced by Saudi Insurance industry. The study is based primarily on primary data
collected randomly from 500 users of insurance, from 400 non-users of insurance and 80
insurance executives through structured questionnaire in Jeddah city of Saudi Arabia. The
three questionnaires were developed in English and translated into Arabic for effective
response due to Saudi Culture, and language. The response from the three groups of
respondents were analyzed using simple statistical techniques such as percentages, mean,
chi-square tests, factor analysis, and ANOVA analysis with the help of Statistical Package
for the Social Sciences (SPSS). The results of the study show that the social and regulatory
factors played crucial role in the consumers decision in purchasing insurance. However it
was also found that the public at large is unaware about the benefits of insurance, and
various types of insurance products. The insurance companies shall focus of promotional
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marketing strategies. The marketers primary focus should be on promotional activities.
Manvendrapratapsingh et al., (2011)67 a study on Insurance and economic
development in India exhibits a direct positive correlation on the growth path. Insurance
companies, both life and nonlife, have been playing the role of financial intermediaries
and performing extremely useful functions in our economy. In India, insurance sector was
opened for private participation with the enactment of the IDRA Act, 1999. Since then, 22
private companies have been established in life insurance sector. All these players are
actively introducing innovative products to meet the specific needs of the prospective
policyholders. However, life insurance companies, particularly private sector players, give
more attention in selling unit linked plans that are not suited to the real needs of the
insured. Of the various alternative distribution channels, agency is still dominating and the
successful one. Given poor level of consumer awareness, strong customer education
programs and promotional strategies are the immediate requirements. Exploring more
distribution channels of microinsurance for untapped rural market is extremely important.
Furthermore customer service is the key for the success and life insurance companies
therefore should give more attention in post sales services rather than presales services.
Overall, our paper shows the important aspects of life insurance marketing activity from a
services perspective and highlights the contemporary issues and challenges facing the life
insurance companies in product marketing.
BeenishShameem and Sameer Gupta (2012)68 conducted a study which was
designed to evaluate the marketing strategies in life insurance service sector and assess
how these strategies boost sales and marketability of a product which ultimately lead to
customer satisfaction. The insurance scenario faces multiple challenges such as increased
costs of operation, regulatory pressures, and inflexible technology infrastructure. These
pressures are compounded by low to moderate premium growth & the increasing burdens
of regulatory compliance. Keeping all the above problems around the study would attempt
to study all the factors that contributed to the effective marketing strategies. This paper
presents different marketing strategies that are taken up in life insurance services keeping
in view external and internal environment of the firm. Marketing strategy is the basic
approach that the business units will use to achieve its objectives, and it consists of broad
decisions on target markets, market positioning and mix, and marketing expenditure levels.
As the financial services sector has become more competitive, financial institutions need to
consider, ways of developing relationships with their existing customers in order to defend
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their market share. Strategic dimension of marketing should focus on the direction that an
organization would take in relation to a specific market or set of markets in order to
achieve a specified set of objectives. Every insurer must recognize that its "strategic
posture" depends partly on the competitive environment, partly on its allocation of
marketing resources. An insurance firm strategy is a plan for action that determines how an
insurer can best achieve its goals and objectives in the light of the existing pressures
exerted by competition, on the one hand, and its limited resources on the other hand.
Valentin, E. C., Degnan, and R. D., &Ntaganira, J., (2012)69 justify the need for
special focus required to Indian Health Insurance. The major stimulators in availing health
insurance are tax rebate, security (both financial and health), risk coverage, health
leverage, out of pocket expenditure, neutralizing rising healthcare cost.
Despite these economic conditions, Indians lack initiative in Health insurance
subscription. One obligating reason behind the same might be the low awareness about
health insurance. While lack of funds, low willingness to join, shortage of Intermediaries,
Outreach, incapability of sales staff, lack of reliability, lack of comprehensive coverage,
unavailability and inaccessibility of services, vague terms and conditions, no return on
investment, better investment options, hidden cost involved, saving in some other area,
large number of formalities (Yellaiah, J., & Ramakrishna, G., 2012)70 are the other
probable reasons for low subscription of health cover in India.
Anand Thakur and Sushil Kumar (2013)71 Examined Understanding the low
penetration in the Indian Health Insurance Industry (presently 32%), and leading MNCs of
the world were venturing aggressively in to this sector. It is further endorsed by the fact
that India spends only 6-7 % of GDP on Health care. A comparison of health care spending
patterns between India and developed countries approve the same, as only 5 % Indians
avail the same. In Canada and UK, Health care is absolutely free of cost. While in India,
complete coverage is still not accessible, despite bulky premium payment. The present
paper critically evaluates the marketing strategies of leading players in Indian Health
Insurance Sector. Further, some useful marketing Implications (with special focus on STP
and marketing mix) have been suggested at the end.
NisakornPhichitchaisopa and ThanakornNaenna (2013)72 results found that the
factors with a significant effect are performance expectancy, effort expectancy and
facilitating conditions. They were also found to have a significant impact on behavioral
intention to use the acceptance healthcare technology. In addition, in Thai provincial areas,
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positive significance was found with two factors: social influence on behavioral intention
and facilitating conditions to direct using behavior. Based on research findings, in order for
healthcare information technology to be widely adopted and used by healthcare staffs in
healthcare supply chain management, the healthcare organizational management should
improve healthcare staffs behavioral intention and facilitating conditions.
PrarthanaShahi (2013)73 stated that the present state of Insurance Sector in India
is awe-inspiring as far as the awareness of customers is concerned. The customers of today
are well aware about the different alternatives that support them the best to fulfill their
desires. Health Insurance companies has well managed to take the spirit of competition in a
positive way which has helped the corporation to grow further with high strength of mind
in contribution to the growth of the country. There are few more areas where contribution
of the corporation in the life insurance sector needs to be updated. The present research
study thus reveals those important areas where more contribution on the part of Health
Insurance companies is required. The one is to increase in the number of offices both in
urban and rural areas which will help the corporation to increase their business and reach
among the customers. Health Insurance companies should also open more Life- Plus
offices and authorized collection centers to make its objectives achieved in true way to
spread the life insurance business in every nook and corner of the country. Health
Insurance companies should concentrate on agents training to make them updated as per
market requirements and professionalism to tackle the queries of customers and doubts
raised in their mind by other life insurance competitors of the market. Health Insurance
companies must increase their agents base to retain its dominating market share because
agents are the backbone of the corporation. The increased number will not only help the
corporation to facet their visible presence in the market but also in turn help in increasing
their business volume too.
Sinha, A. (2014)74 studies life insurance industry in India which had its birth in the
early part of the nineteenth century. For better management of the insurance business,
several Acts have been passed from time to time. Two noteworthy events in the history of
life insurance are (i) the formation of the Life Insurance Corporation of India in 1956,
which served as a monopoly till the year 2000 followed by (ii) the opening up of the
insurance sector to the private players in 1999, who were given the permission to operate
either single-handedly or as a joint venture with any other private player(s) and/or foreign
partner. This drastic regulatory change brought an end to the monopoly status of LIC, and
108
also encouraged the private players to enter into the insurance space. To keep pace with the
fast-changing industry environment, one of the functions that is gaining strategic
importance is the coming up of newer channels of distribution, which would spread the
business to newer markets and serve the customers cost-effectively, steadily, and speedily.
This exploratory research (which was carried out in the time period from May-July 2012)
discusses the various distribution channels (that emerged in the deregulated period and
changed the overall industry trend) operating over a period from 2005-06 to 2009-10. The
researcher considered seven dominating private players in the life insurance industry to
understand the recent patterns in distribution. The analysis clearly shows a move-away
from the traditional channels by the private sector.
While a comparison of health care spending patterns between India and developed
countries speak about the immense potential, as only 5% Indians avail the same
(Saraswathy, M, 2014)75. While in India, complete coverage is still not accessible, despite
bulky premium payment. Further, 85 % of working population in India do not have Rs.
5,00,000 as instant cash; 14% have Rs. 5,00,000 instantly but will subsequently face a
financial crunch; Only 1% can afford to spend Rs. 5,00,000 instantly and easily; and 99%
of Indians will face financial crunch in case of any critical illness.
2.3 RESEARCH GAP
From the literature review and the earlier discussions, it could be seen that there are
many areas in the field of health insurance, specially the relationship between the insurer
and the health care providers, which are unexplored or need to be explored further in the
Indian context. Some important theoretical and methodological gaps found are as follows:
Studies which have analyzed relationship between healthcare providers and the
insurer have done that only in the context of developed countries and a few developing
countries. No study, which analyses the relationship between insurer and the health care
provider from a strategic perspective, has been done in the Indian context till now. The
trends in the health insurance industry are documented well in the developed countries.
The growth of managed care both the HMOs and PPOs and its different derivatives, has
been studied well in developed countries. It is through these studies one is able to identify
the past trends, the impact of interventions, both governmental and non-governmental. The
trend analysis also helps to read and gauge the industry trajectory and show pointers with
reference to resource requirements and future competitiveness in the industry. It also helps
to learn from past mistakes and create innovative strategies keeping in mind the different
109
data sets and interlink-ages. Such trend analysis of the Indian health insurance industry
was found missing in the current literature.
It has been well documented that the health insurance industry is prone to both
adverse selection and moral hazards. The effect of these challenges on cost and on
premium is also being studied. However, there is no literature in the Indian context which
measures the relationship between the hospitalization cost paid by the insurer, components
of hospitalization cost and the risk covered by the insurer. There is an industry wise feeling
that the cost in case of cashless hospitalization is more than that of re-imbursement. This is
based on the premise that the insured does not have any incentive to control cost in-case of
cashless hospitalization. On the other side, it is being argued that the TPAs in the Indian
health insurance industry was introduced, with one of its objective as cost saving. They
achieve this by negotiating rates with health care providers. In health insurance there are
three main players i.e. the insured, the insurer and the provider. There are studies which
have studied the system from the customer perspective and few have studied from the
insurer and the providers perspective. The studies which have been carried out in India to
study the providers perception are limited to the southern and western part of the country.
No study has been undertaken to study the provider perceptions in the northern and the
eastern part of the country. There has been no study which has taken a comprehensive
view of the cashless process and talks about different factors that can affect synergy among
insurers and providers. Therefore, there is a need to take a holistic view of this sector and
study it from a different perspective all together.
2.4 CONCLUSION
The review of above literature reveals the factor driving the customers towards
particular health insurance, perception, satisfaction and problems are discussed. The
improvement and services provided by the insurance companies to attract customers are
also reviewed. Most of the studies were conducted only in foreign countries but there were
only few studies are available in South India. The present study focuses on A Study on
Customer Perception, Attitude and Satisfaction towards Health Insurance in Erode
District
110
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CHAPTER III
GROWTH AND DEVELOPMENT OF HEALTH INSURANCE AT
ERODE DISTRICT
3.1 INTRODUCTION
The health is a human right and its accessibility and affordability have to be made
sure. The escalating cost of medical treatment is beyond the reach of common man. While
well-to-do sections of the population, both in rural and urban areas, have accessibility to
and affordability of medical care, the same cannot be said about the populace belonging to
the poor section of the society. Healthcare has always been a problem area for India, a
nation with huge population, with a larger percentage of this population living in urban
slums and in rural areas, below the poverty line. The administration and citizens have
started exploring various health financing options to manage the problems arising out of
the rising cost of care and varying epidemiological pattern of diseases. Hence, to improve
and sustain the health insurance market, the insurance companies need to know how to
attract new customers and cover the entire untapped market.
3.2 HISTORY AND GLOBAL PERSPECTIVE
Under the General Agreement on Trade in Services (GATS) of the World Trade
Organization (WTO) sector classification scheme, health insurance falls under the financial
services sector. Financial services are divided into two sectors: 1) insurance and 2) banking
and other financial services. Within insurance, there are four sub-sectors: a) life, accident
and health insurance, b) non-life insurance, c) reinsurance and retrocession, and, d)
services auxiliary to insurance, including broking and agency services. Despite the
appearance of the term "health insurance" under the first category, many country
commitments affecting health insurance services are in fact covered by the second
category (non-life insurance). In India health insurance is a part of non-life insurance
sector. However, life insurance companies are allowed to sell health insurance products. In
India insurance is a federal subject and is governed by the Insurance Act 1938 and the
Insurance Regulatory and Development Authority Act, 1999. In India the Insurance
business is divided into four classes namely; a. Life insurance, b. Fire insurance, c. Marine
insurance and d. Miscellaneous insurance. Life insurers transact life insurance business and
general insurance transact the rest. Health insurance falls under the miscellaneous
insurance business but there is no clear demarcation as the same is also offered by the life
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Globally, the history of general insurance can be traced back to the early
civilization. As the incidence of losses increased with the advancement of civilization,
slowly the idea and concept of risk pooling and loss sharing started taking roots. Historical
facts show that the Aryans through their cooperatives practiced the loss of profits
insurances. The Mediterranean merchants also practiced insurances from as early as the
fourth century BC through the issue of bottom bonds, which is an advance of money in a
ship during the period of voyage, repayable on the arrival of the ship. The Code of Manu
also indicates the practice of marine insurance by Indians with their counter parts in Sri-
Lanka, Egypt and Greece.
When, talking about the history of health insurance in India, one will find that
health insurance is not of recent origin. One can argue that the concept of health insurance
is there since the beginning of the mankind. In the Vedic literature its stated that people
use to sacrifice animals to Gods and in return expected good health. It is interesting to link
this activity with that of the current concept of health insurance i.e. to pay the premium
(animal sacrifice) to safeguard them from ill health.
However, in such a situation there was no transfer of risk in contractual terms. The
concern for loss resulting from accident and illness can be traced to ancient civilizations. In
fact, one of the earliest forms of health insurance may have been based on the ancient
custom of paying the doctor while in good health and discontinuing payment during
periods of illness.
The development of health insurance in existing form in India is based on pattern
followed in Europe and America. Also, health Insurance or medical insurance schemes had
developed in India due to industrial relations problems between the employer and the
employees. The Corporate Houses used to offer core and non-core benefits to the
employees. The insurance policies were granted to large Corporate Houses purely on an
accommodation basis.
The cover offered to the employees, was in the nature of hospitalization and
domiciliary treatment for dental and non-surgical eye treatment. Before examining the
trends in the Indian health insurance industry, the global insurance market was looked into.
The market size of the global insurance industry which is measured in terms of premium as
a percent of global GDP was first studied, followed by studying the data on insurance
density and insurance penetration. This section is then followed by the overview of the
Indian healthcare system.
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3.3 OVERVIEW OF INDIAN HEALTHCARE SYSTEM
The trends in the health insurance market are governed by multiple factors, one of
which is the nature and type of healthcare system existing in the given geography. For
example, if the healthcare system promotes out of pocket expenditures then there would be
a large percentage of population which would depend on private healthcare providers for
their medical needs. This will lead to higher demands for the private care and thus the cost
of care would increase much faster.
A point will come when the healthcare cost would be so high that it would become
difficult for an average individual to afford health care cost. It will be then that the health
insurance companies would come into play and would try to apply the principle of risk
pooling and principle of large numbers. On the other side they would also make efforts to
bring down the cost of healthcare expenditure by contracting with healthcare providers for
better rates and also by monitoring the cost closely. Thus, it is important to study the
overview of the Indian healthcare system in context of the trends in the Indian health
insurance industry.
3.3.1 Determinants of Health
Before looking into the Indian healthcare system let us briefly examine the
determinants of health. As per World Health Organization a child born in a developing
country is ten to fifteen times more likely to die before reaching his first birthday than a
child born in a developed country. Similarly, the individual may expect to live up to fifty
years compared to eighty years in some developed countries.
There has been an observation that during World War II, while fighting in the same
area in similar conditions more European soldiers developed jaundice (Hepatitis A) as
compared to Indian soldiers. So what determines whether a person will fall ill or die? It is
just being born or living in a particular geographical area or more than that? Obviously its
more than that. Health is a multifactorial amalgamation of various determinants. Some of
the important determinants of health are examined and then linked with the cover extended
under health insurance policy. This determinant includes genetic, environmental, socio-
cultural, economic, health services, political system and technological advancements.
3.3.1.1.Genetic
The positive health advocated by WHO implies that a person should be able to
express as completely as possible the potentialities of his genetic heritage. The genetic
makeup of each individual is unique and cannot be altered after conception. The genetic
120
constitution determines the health status to a great extent. It is may be due to this reason
that there are specific exclusions with respect to congenital illness (both internal and
external) in most of the health insurance policy. Now, the question arises if the health
insurance firms should be allowed to exclude any genetic conditions in a person or not?
The answer is not an easy one and one need to examine this on a case to case basis and
when lack of any specific regulations the decision becomes more difficult.
3.3.1.2.Environmental
Environment may be internal or external. Internal environment is dealt with by
internal medicine. The external environment involves all that is external to the individual.
The external environment factors range from housing, water supply, family structure and
occupation. In health insurance the internal environment is covered quite fairly. The only
clause is that of hospitalization i.e. the insured need to be hospitalized for a minimum of
twenty four hours. However, there are few exceptions where day care surgeries are covered
due to advancement in medical technology.
3.3.1.3 Socio-Cultural
Social interactions with parents, peer groups, friends and siblings are through
school and mass media affects the life-style of individuals. Personal habits like smoking,
alcohol intake, drug abuse are developed through social interactions. Obesity, drug
addictions are few examples of medical problems resulting from social causes. Life style
can have a positive effect on health. Reduction of smoking, avoiding red meat, regular
exercise all contribute to a healthy life style. In health insurance underwriting all these
factors are kept in mind to measure the potential risk of health and based on the life style
of the individual necessary discounts or loading is done in the base premium. Now-a-days
one can find that most of the health insurers are focusing on the lifestyle of the customers
and trying to bring positive health outcomes by extending memberships to health clubs and
exercise centers.
3.3.1.4.Economic
Economic performance is the major factor in reducing morbidity, increasing and
improving life expectancy. Economic status determines the purchasing power, quality of
life, family size and disease pattern. It is one of the crucial factors which determine health
seeking behavior. We have seen in India how the central and state governments fund the
health insurance schemes for the poor who does not have the purchasing power.
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3.3.1.5.Health Services
The health services must be equitably distributed, affordable and socially
acceptable. The health services can be offered at the primary, secondary and tertiary level.
It can also be bifurcated in terms of public and private space. From health insurance
perspective it is important to ensure that there is synergy between the offering of the public
and the private healthcare providers i.e. in places where there is no public infrastructure;
health insurance can be used as a mechanism to deploy funds for the development of
private health care services. This could be practically seen in districts where RSBY policy
has been launched.
3.3.1.6.Political System
The percentage of Gross National Product (GNP) spent on health is a quantitative
indicator of political commitment. To achieve the goal of health for all, WHO has set the
target of at least 5 percent expenditure of each countrys GNP on health care. India spends
3 percent of its GNP on health care. In addition to this it is the political system which
decides the investment of funds by the foreign players into insurance sector. Currently, the
FDI cap is of 26 percent in any insurance company. However, the bill to raise the FDI limit
to 49 percent is on its way and should be passed given the current diplomatic pressures
from the developed countries like US.
3.3.1.7.Technological Advancements
There are many who suggest that improvement in technology has led to better
health care outcomes. Whether, the health care cost has risen or not due to technological
advancement is not clearly known. In health insurance this determinant is used to extend
benefits to the customer by covering day care treatments i.e. medical treatment and or
surgical procedure which is undertaken under general or local anesthesia in a hospital or a
day care center in less then 24 hours because of technological advancement. Thus we have
seen that there are multiple determinants on ones health and how each one of them is
linked with the health insurance industry. Now, the overview of the Indian health care
system followed by healthcare financing is presented.
3.4 TRENDS IN INDIAN HEALTH CARE SYSTEM
The health care system in India is characterized by multiple systems of medicine,
mixed ownership patterns and different kinds of delivery structures. Public sector
ownership is divided between central and state governments, municipal and panchayat
local governments. Public health facilities include teaching hospitals, secondary level
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hospitals, first-level referral hospitals (Community Health Centers), dispensaries Primary
Health Centres (PHCs), Sub-Centres, and health posts. Also included are public facilities
for selected occupational groups like organized work force (ESI), defense, government
employees (CGHS), railways, post and telegraph and mines among others. The private
sector (for profit and not for profit) is the dominant sector with 50 percent of people
seeking indoor care and around 60 to 70 percent of those seeking ambulatory care (or
outpatient care) from private health facilities. While India has made significant gains in
terms of health indicators - demographic, infrastructural and epidemiological (see Table
4.5) it continues to grapple with newer challenges. The country is now in the midst of a
dual disease burden of communicable and non-communicable diseases. This is coupled
with spiraling health costs, high financial burden on the poor and erosion in their incomes.
Around 24 percent of all people hospitalized in India in a single year fall below the
poverty line due to hospitalization. An analysis of financing of hospitalization shows that
large proportion of people especially those in the bottom line people borrow money or sell
assets to pay for hospitalization. This situation exists in a scenario where health care is
financed through general tax revenue, community financing, out of pocket payment and
social and private health insurance schemes. India spends about 4.9 percent of GDP on
health. The total health expenditure in India is around 5 percent of GDP, with breakdown
of public expenditure (0.9 percent); private expenditure (4.0 percent). The private
expenditure can be further classified as out-of-pocket (OOP) expenditure (3.6 percent) and
employees/community financing (0.4 percent). It is evident that public health investment
has been comparatively low. In fact as a percentage of GDP it has declined from 1.3
percent in 1990 to 0.9 percent in 2010. Furthermore, the central budgetary allocation for
health (as a percentage of the total Central budget) has been stagnated at 1.3 percent while
in the states it has declined from 7.0 percent to 5.5 percent. In light of the fiscal crisis
facing the government at both central and state levels, in the form of shrinking public
health budgets, escalating health care costs coupled with demand for health-care services,
and lack of easy access of people from the low-income group to quality healthcare, health
insurance is emerging as an alternative mechanism for financing of health care in India.
A population pyramid, also called an age structure diagram, is a graphical
illustration that shows the distribution of various age groups in a human population
(typically that of a country or region of the world), which ideally forms the shape of a
pyramid when the region is healthy. A great deal of information about the population
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broken down by age and sex can be read from a population pyramid, and this can shed
light on the extent of development and other aspects of the population. A population
pyramid also tells how many people of each age range live in the area. There tends to be
more females than males in the older age groups, due to females' longer life expectancy.
Figure 4.2, 4.3 and 4.4 depicts the population pyramid by broad age-group, projected
population pyramid 2001 and 2026 of India. In India the demographic transition has been
relatively slow but steady.
As a result the country was able to avoid adverse effects of too rapid changes in the
number and age structure of the population on social and economic development. In the
period between1996 to 2016, population in the age group greater than 60yrs will increase
from 62.3 to 112.9 million.
3.5 HEALTH INSURANCE IN INDIA
Before looking into the history of health insurance in India it is important to know
its definition. Health insurance is a form of insurance whose payment is contingent on the
insured incurring additional expenses or losing income because of incapacity or loss of
good health. A Health Insurance Policy is a contract between an insurer and an individual
or a group in which the insurer agrees to provide specified health insurance cover at a
premium. Depending on a policy, the premium may be payable either as a lump sum
amount or in installments. Health Insurance generally provides direct payment or
reimbursement of expenses incurred during an illness. The nature of protection would
depend on the kind of policy purchased and the cost and range of protection under that
policy. Health insurance could be either a personal scheme or a group scheme sponsored
by an employer. Unlike life insurance where there are only two parties i.e. the insured and
the insurer, in the case of health insurance there are three parties namely the insured, the
insurer and the provider (network hospital). There is also TPA which acts as an extended
arm of the insurance company and helps in claim processing, managing the hospital
networks and at times helping in enrollment of customers. The generic features of
insurance are equally applicable to the concept of health insurance. Insurance primarily
rests on the principle of pooling of risk associated with the same cause i.e. health to share
losses on some equitable basis. Insurance whether it is health or any other line of
insurance, is a concept of sharing financial burden. Insurance follows a simple statistical
principle of diversity or pooling of resources and sharing of risk. This means that from out
of a given population that is Insured, those needing the financial support by way of a claim
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for loss is very small. Especially in the case of Health Insurance, it is less than 5 percent of
the total population covered in its current form. This in effect means that out of the amount
contributed by 100percent, financial claims are paid to be only 5 percent. This theory of
diversity is an important factor in a country like India. Thus, health insurance in a narrow
sense would be an individual or group purchasing health care coverage in advance by
paying a fee called premium. In its broader sense, it would be any arrangement that helps
to defer, delay, reduce or altogether avoid payment for health care incurred by individuals
and households. Taking into account various developments in side and outside the
insurance sector, showcasing the developments in the field of insurance, including
developments specific to health insurance, with brief summaries are given in chronological
order.
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Health insurance in India (Chronology: 1912- 2011)
YEAR Important Developments (Pre - Privatization)
1912 Insurance Act 1912 was passed, setting down rules and regulations
specific to insurance industry.
1923 Workmans Compensation Act passed, aims to provide workmen and/or
dependants some relief in case of accidents arising out of or in the course
of employment, causing death or disablement
1938 Insurance Act 1938 was passed, recognizing two categories, i.e. Life and
non-life (general) insurance. Led to an insurance wing being set-up,
attached to the Ministry of Finance.
1948 Employees State Insurance (ESI) Act was passed, providing protection to
workers & dependents in the organized sector for sickness, maternity,
death
1954 The Central Government Health Scheme started in 1954, providing health
cover to employees of Central Government, MPs, Judges, Freedom
Fighters and their families.
1956 Life Insurance industry was nationalized and Life Insurance Corporation
of India (LIC) set up subsequently.
1959 Mudaliar Committee was constituted, recommended provision of long-
range health insurance policy for all and strengthening Primary Health
Centers.
1972 General Insurance industry nationalized.
1986 General Insurance Corporation of India (GIC) introduced mediclaim
insurance policy.
1999 Insurance Regulatory and Development Authority (IRDA) Act was passed
2000 w.e.f. Dec 2000, GIC became the National Re-insurer, its earlier role of
co-ordination between the four subsidiaries taken over by a new body,
General Insurance (Public Sector Companies) Association (GIPSA).
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YEAR Important Developments (Post - Privatization)
2001 IRDA introduced several insurance regulations including provisions for
Third Party Administrators system in health insurance. Nine private
general insurance companies get registered with IRDA
2002 The Insurance Regulatory and Development Authority (Protection of
Policyholders Interests) Regulations, 2002 was passed to safeguard the
interest of the policy holder.
2003 IRDA set up a National Health Insurance Working Group. With Sub
group on data, standalone health insurer and product innovation. This
Committee was formed with the objective of identifying the existing
problems in the health insurance industry and to make recommendations
to enable and encourage a large number of companies to participate in the
growth of insurance in health financing.
2004 IRDA appointed a sub-committee to specifically look into the areas of
registration of standalone health insurance companies and to suggest
innovations in health insurance products.
2005 Roadmap was made for de-tariffication of general insurance market rolled
out by IRDA
2006 First Stand alone Health insurance company came into business with a
capital requirement of Rs.100 crore. The guidelines on file and use
requirements for general insurance products were issued which supersede
the earlier IRDA guidelines.
2007 The insurance market was de-tariffed. Earlier 70 percent of the General
Insurance business was driven by various tariffs being prescribed by
TAC), established under Sec.64 UM of Insurance Act, to control and
regulate the rates, advantages, terms and conditions that may be offered by
insurers in respect of general insurance business. Since any breach of
tariffs constitutes a violation of Insurance Act, 1938, in a tariff driven
market, the leverage for taking flexible decisions regarding the pricing
based on the merit of individual risk was virtually nil.
2008 Insurance Information bureau set up by IRDA (primarily working on
Health and motor data). General insurance Council for the first time
defined the "Pre-existing" clause and made it standard across the industry.
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2009 The Renewability of Health insurance policies circular issued on 31st
March 2009 advises non-life insurers not to generally decline renewals
except for certain specified reasons. Detailed instructions on Health
Insurance for Senior Citizens stipulate that all health insurance products
filed on or after 1st July, 2009 must allow entry up to 65 years of age, and
also to make adequate dissemination of product information on websites.
Also, the FICCI report on Health Insurance released in July 2009 includes
Standard Treatment Guidelines for 21 common causes of hospitalization.
2010 The Preferred Provider Network (PPN) of hospitals introduced in July
2010 to offer cashless medical treatment following the initiative taken by
the four pubic insurers to bring discipline on the pricing of hospital
services. The health insurance market continues to be dominated by the
four state-owned general insurers, which together accounted for almost 60
percent of the premiums.
2011 A key development was the announcement of portability of health
insurance policies by IRDA. The regulator has issued guidelines for the
arrangement to be effective from 1 July 2011, which will allow
policyholders to switch providers on the same policy terms, particularly
without losing the credit gained for pre-existing conditions in terms of
waiting period. Circular on De-Listing of Hospitals and guidelines on
Distance Marketing also rolled out.
General insurance as a whole, developed with the industrial revolution in the West
and with the consequent growth of seafaring trade and commerce in the seventh century. In
India too, evidence of insurance in some form can be traced as early as from the Aryan
period. The British and some of the other foreign insurance companies through their
agencies transacted insurance business in India. The first general insurance company in
India was the Triton Insurance company Ltd., established in Calcutta in 1850 AD, with the
British holding major share. The first general insurance company by Indian promoters was
the Indian Mercantile Insurance company Ltd. started in Bombay in 1906-07. Following
the First World War, several foreign insurance companies started insurance business in
India, capturing about 40 percent of the insurance market in India at the time of
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Independence. It was in the year 1912 that the insurance Act was passed which was then
revised in the year 1932. This was under the revised Act that the Life and Non-life
categories were recognized. In India the general insurance is also known as Non-life.
The health insurance was a part of the non-life business; however, there was no clear
demarcation then. Even today both the life and the non-life companies are allowed to have
health insurance products. The year 1940-1960 has witnessed the launch of the ESI and the
CGHS schemes. These schemes had the elements of health insurance concepts but were
not placed with any insurer. In the year 1971, the government by an ordinance nationalized
the general insurance business, under the General insurance Nationalization Act, 1972 to
ensure orderly and healthy growth of the business. The then existing 107 companies were
brought under the aegis of GIC of India and were merged with the four public general
insurance players namely the National Insurance Company, the Oriental Insurance
Company, the United Insurance Company and the New India Assurance Company. These
four public insurance companies were distributed geographically and had their head offices
at Kolkata, New-Delhi, Chennai and Mumbai respectively. The primary reason for such
division was to have wider spread with regional focus. It was expected that the subsidiary
companies would provide effective competition to each other with the support from GIC.
The GIC facilitated coordination, competition and laid down standards for market conduct,
customer service and development of the market. In 1973 the general insurance industry
was nationalized and with the liberalization of the market, the four public players became
autonomous and were directly answerable to the Ministry of Finance as their owner. The
General Insurance Corporation of India was designated as the Indian Re-insurer. In 1981,
the Apex Body of Public Sector Insurance Companies i.e. GIC designed a limited cover for
individuals and families for covering their hospitalization needs. This was replaced by a
mediclaim policy in the year 1986 under a market agreement to provide insurance benefits
to individuals and groups under a group mediclaim policy. The then Mediclaim Insurance
Policy provided reimbursement of medical expenses for hospitalization and domiciliary
hospitalization, but it does not cover OPD treatment. The sum that is assured under this
policy varies from Rs.15, 000 to Rs.5 lac. It was available to the people from the age of 5
years to the age of 80 years. The children between the age of 3 months and 5 years were
covered with some additional premium. The minimum premium was Rs.213 per annum for
the lowest sum assured, that is, Rs.15,000 (for people below 35 years of age). The highest
premium was Rs.17,156 per annum for people in the age group between 76 years and 80
129
years for the maximum sum assured, that is, up to Rs.5 lac. There was a family discount of
10 percent and some cumulative bonus if the previous year had been claim-free. The
scheme so introduced was modified in 1991 and 1996 in the light of experience and
suggestions received from the insuring public and medical fraternity. The benefit that was
provided under the mediclaim policy was on reimbursement basis only. Reimbursement of
the expenses was allowed by insurance companies on production of the required bills given
by the hospitals where the treatment was taken. This created the need for cashless payment
facility at hospitals, as it was difficult for an insured person to arrange funds at the time of
admission in the hospital. Requests were made to GIC for introducing a system whereby,
payment could be made directly by the insurance company to the hospital where the
treatment was taken. Insurance companies entered into tie up with hospitals to provide
such benefit whereby an insured person could collect a certificate of his eligibility from an
insurance company and produce the same to the hospital for taking the treatment. The
settlement of the claims was directly made with the hospitals. This tie up with hospitals
failed in course of time in view of some reported cases wherein the hospital managed to
getclaims reimbursement of such insured persons who took treatment for pre-existing
ailments. As a part of the financial reforms in the year 1993 the Government of India
appointed a committee know as Malhotra Committee on reforms in the insurance sector.
This committee rightly recommended the opening up of insurance sector to competition
stating that introduction of competition will result in better customer service and new
products. As the insurance market open in the year 2001, there were nine new entrants. Up
to June 2011 there were 48 insurance companies licensed by IRDA and doing business in
India (24 life insurance companies and 24 non-life insurance companies and within non-
life, there were three specialist health insurance companies).
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3.6 MAJOR PLAYERS AND PERFORMANCE
TABLE 3.1
GROWTH IN HEALTH INSURANCE PREMIUM
Year Value
(Rs. In crore)
2002 761
2003 1004
2004 1354
2005 1732
2006 2222
2007 3209
2008 5125
FIGURE 3.1
GROWTH IN HEALTH INSURANCE PREMIUM
6000
5000
4000
3000
2000
1000
0
2002 2003 2004 2005 2006 2007 2008
Series 1 Column1 Column2
Source: Rohit Kumar (2011). Health Insurance: The Need of the Hour. Jaipur:
RajPublication House.
131
The Indian health insurance industry started to develop with the worth of Rs.761
crores in 2002 and gradually increase to attain Rs.1004 crores in 2003. It subsequently
increases to Rs. 1354 crores in 2004 and Rs. 1732 crores in 2005. The unexpected raise in
the insurance industry increases the worth up to Rs. 2222 crores in 2006 and continuously
increased and reached Rs. 3209 crores in 2007. Finally it attained the worth of Rs.5,125
crores with a compounded annual growth rate of approximately 37 percent in 2008. The
health insurance industry is one of the fastest growing segments among non-life insurance
segments.
Within the non-life sector, motor vehicle insurance does the maximum business in
terms of premium. After motor, health insurance business occupies the second position,
followed by fire and marine business. Among all these segments, in 2007-08 and 2008-09,
health insurance has seen the maximum growth.
FIGURE 3.2
NON-LIFE INSURANCE COMPANY- SEGMENT WISE PREMIUM
(2007AND 2009)
Source: Rohit Kumar (2011). Health Insurance: The Need of the Hour. Jaipur:
RajPublication House.
Again in health insurance business the public sector insurance companies had more
than 50 percent of the market share, measured in terms of earned premium (year 2008-09).
However, there was a difference in the ranking of public and private sector companies. The
third rank was occupied by ICICI Lombard. One of the interesting observations was that
132
Star Health insurance company (the first standalone health insurance company in India)
had captured 11 percent of the overall market share. Thus, one can argue that standalone
health insurance companies are going to increase the level of competition within the health
insurance market and are here to stay.
On examining the latest data on market share for the period April-May 2011 it was
observed that ICIC Lombard had 29 percent of the market share, Star Health had 23
percent of the market share followed by HDFC Ergo (9 percent), Royal Subdram
(6 percent), Reliance General (5 percent), IFFICO Tokyo and Apollo Munich (4 percent
each). Here, it is interesting to note that the three standalone insurance companies captured
some 28 percent of the market share within the private insurance space. The customer
segment are wise premium data not available currently.
However, the regulator had asked the insurers and TPAs to start providing the
health data on the basis of customer segment i.e. retail, corporate and mass business. In the
area of retail health product it was found that different levels of cover are being offered by
different insurance companies. In most of the cases the pre-existing disease was not
covered before fourth year from policy inception date. It was also observed that there were
co-payment and sub-limit options being built-in in the product. This may be primarily
because to reduce the claim paid cost and also to offer retail health insurance policy at a
lower price.
The incurred claim ratio for both private and public sector companies for three
consecutive years i.e. 2006-07 to 2008-09 is presented in table 4.8. It was observed that the
claim ratio for public sector insurance companies was 20 to 15 percent higher than that of
the private players.
One of the possible reasons for this difference could be because the public sector
insurance companies might be offering the health insurance product at a lower price to
corporate houses. In other words, the public sector insurance companies might be
subsidizing the health insurance premium in lieu of premium received on other insurance
products like fire and marine business.
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FIGURE 3.3
MARKET SHARE (HEALTH INSURANCE) - PRIVATE PLAYERS (2009 -2011)
Source: Insurance Information Bureau, IRDA.

TABLE 3.2
MARKET SHARE: NON-LIFE INSURANCE
Health Insurance Company Market share

(%)
New India 18.15
National 14.1
United India 14.09
Oriental 13.06
ICICI Lombard 8.63
Bajaj Allianz 6.31
Relaince 11.21
Iffco Tokio 2.71
Tata AIG 4.53
Chola Mandalam 2.65
Royal Sundarams 2.29
Others 2.26
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New India which was at the top of the list, had a market share of 18.15 percent,
National Insurance company had 14.1 percent, United India 14.09 percent followed by
Oriental Insurance with a market share of 13.06 percent. In the private players ICICI
Lombard top the list with 8.63 percent market share followed by Bajaj Allianz and
Relaince Insurance Company with 6.31 percent and 11.21 percent of market share
respectively. Iffco Tokio Company had a market share of 2.71% followed by Chola
Mandalam and Royal Sundarams with 2.65% and 2.29% respectively. The remaining 2.26
percent was held up by the stand alone health insurance companies. The Indian health
insurance industry today is worth Rs.60,497 crores with a compounded annual growth rate
of approximately 42.3 percent expected between 2008 and 2014.
FIGURE 3.4
MARKET SHARE: NON-LIFE INSURANCE (2011 2014)
Market share
2.26
2.29
2.65
2.71 4.53 18.15
11.21
14.1
6.31
8.63
14.09
13.06
New India National United India Oriental

ICICI Lombard Bajaj Allianz Relaince Iffco - Tokio
Tata AIG Chola Mandalam Royal Sundarams Others
Source: Rohit Kumar (2011). Health Insurance: The Need of the Hour. Jaipur: Raj
Publication House.
135
TABLE 3.3
RETAIL HEALTH INSURANCE PRODUCT- MARKET COMPARISON
Market Comparison (Retail policy)
Cover IL Bajaj Chola OIC Ntn'l Star
Hosp
6
30 60 30 30 30
Pre 0
7% of hosp
bill
9
60 90 60 60 max 7k
Post 0
PED 5th 5th No NA 4th No
30 day
Named ailments 2 yrs 2 yrs 1 yr 2 yr 2 yr 1yr/ 2yr
10% co-
pay in non- 10% for
We pay n/w Diab/Hyp &
full
Hospitals 25% if both.
Co-pay claims
Hernia/pile Room
Only in s/cataract Rent 1% Room Rent
of SI,
case of etc. 10% of 2% of SI max
ICU
Sub-limits cataract SI 2% of SI 4k
Two Year
1L-
2L-4L 1L-10L 1L-5L 1L-5L
SI 10L
55/69
60 55 60 60 1L-5L
Entry Age (for
IL- ICICI Lombard, OIC- Oriental Insurance, Ntnl- National Insurance
Source: Authors compilation based on the study of the retails products (2009-10)
offered by selected insurance companies.
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TABLE 3.4
INCURRED CLAIM RATIO
INCURRED CLAIMS RATIO (Percent)
YEAR 2008-09 2007-08 2006-07
PUBLIC 116.60 112.36 157.79
NEW INDIA 107.41 89.88 212.81
ORIENTAL 136.96 123.77 132.51
NATIONAL 111.27 118.01 131.47
UNITED 121.27 135.36 160.05
PRIVATE 85.33 94.81 103.42
ROYAL SUNDARAM 43.57 44.78 46.99
BAJAJ ALLIANZ 78.02 85.19 78.64
TATA AIG 46.71 74.93 61.69
RELIANCE 91.74 112.14 113.01
IFFCO TOKIO 122.23 121.14 152.89
ICICI LOMBARD 86.07 98.79 118.70
CHOLAMANDALAM 108.99 93.03 79.51
HDFC CHUBB 100.5 142.46 87.10
FUTURE GENERALI 141.12 Na Na
GRAND TOTAL 105.95 106.99 141.02
Source: Insurance Information Bureau, IRDA
However, subsidizing should get minimized due to de-tariffication of the
general insurance industry recently. The claim ratio for the public sector has shown
improvement. From more than 100 percent in 2006-07 it has come down to 85.33
percent. However, the claim ratio is till more than 100 percent for 2008-09 and it was
standing at 105.95 percent for both the public and private players.
3.7 CURRENT OPPORTUNITIES AND THREATS
Insurance companies today find themselves surrounded by a variety of
challenges as they work towards profitable growth and to compete in this dynamic
industry. Across the industry the insurance companies face common challenges. The
opportunity and threats include the following:
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3.7.1 Governance and Risk Management
The record losses from hurricanes Katrina, Wilma and Rita have once
again highlighted the scale of the risks faced by insurers in an increasingly complex
and uncertain financial, geopolitical and climatic environment. Model outputs are
clearly critical in monitoring and controlling aggregations and concentrations of risk.
However, the largely unexpected gravity of the losses and resulting pressure on
reinsurance programmes have once again underlined the importance of quality data,
effective validation and calibration of model outputs. The development of Enterprise
Risk Management (ERM) capabilities can help to protect insurers from losses,
earnings surprises and name risk and provide a platform for strengthening
governance, decision-making and regulatory compliance. However, a recent study
conducted by Price Waterhouse Coopers, revealed that many insurers are finding it
difficult to make headway in implementing and embedding ERM in the face of
continuing data, systems and governance challenges. However, the study also found
many examples of how insightful and effective management are helping to overcome
these technical and organizational hurdles and bring greater clarity to insurers ERM
missions.
3.7.2 The Growth Imperative
To be successful in the growth initiatives, companies have tried to design
innovative bundles of good products and services. They have tried to cross sell by
strengthening their relationship with agents and brokers and by spreading their
business in emerging markets like India and China.
3.7.3 Managing The Complexities Of Compliance
In almost all the countries of the world the insurance market is highly
regulated. However, the degree may vary. Growing regulatory requirements are
bringing increased scrutiny to governance, information security, monitoring and
reporting process in insurance companies. Much of this change is taking place in
Europe by the advent of solvency II and in the United States with the upcoming NIAC
revised Model Audit Rule (MAR). The effect of these regulations are likely to be felt
globally, as the evolving regulatory picture set the canvas for the best industry
practices. There is an opportunity to use the regulatory requirements as the catalyst to
improve the overall management and build confidence in the public eye.
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3.7.4 Human Capital
Many insurers are facing mounting skill shortages. Yet, investment in
recruitment, training and career development are often less than other financial
sectors. The primary focus can often be short-term demands rather than securing the
talent companies need to meet longer term strategic objectives. The effect of
demographic shifts, evolving aspirations and accelerating globalization are set to
transform the shape of the global labour market and could make it even harder for
insurers to attract and retain good people. In this competitive labour market,
successful companies need to develop a strategic approach to HR management
capable of anticipating and responding to evolving business needs and workforce
expectations. They will also need to identify and realize opportunities to differentiate
benefits, career development prospects and other key aspects of their employment
brand in both developed and emerging markets.
3.7.5 Leveraging Analytical Tools
To gain deeper insight and better operation the insurance companies have used
predictive analytics to support underwriting efforts for several years. Todays
advanced analytical tools allow insurers to improve decision making by moving
beyond subjective judgment. These tools not only help them manage claims, reach
and retain customer and strengthen their distribution network but also improve
underwriting capability. The greatest potential lies in controlling both hard & soft
fraud, which cost the industry some $80 billion a year. Health insurance fraud
contributes maximum amounting to USD 54bn followed by Auto, Business &
commercials and Homeowner.
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FIGURE 3.5
ANNUAL LOSSES DUE TO INSURANCE FRAUD
Source: Coalition against insurance fraud

Given the above opportunities and challenges the top executives of the
insurance companies are quite optimistic about the future growth of insurance
industry. In April 2009, the Economist Intelligence Unit surveyed, on behalf of
KPMG International, 315 global insurance executives around the world. The
respondents were split among life insurance (42 percent), non-life insurance (49
percent) and reinsurance (9 percent) companies or divisions. The Key findings of the
survey were as under:
Over half of respondents see positive prospects for growth in the next 12
months.
While respondents believe themselves to be well-capitalized, and rating
themselves highly in terms of effectiveness across most risk management
activities, there is a clear sense that a greater focus on both capital
management and risk management would be warranted.
Two thirds of companies have appointed board level risk committees.
There is limited appetite for incremental spend, with almost half the respondents
expecting to improve performance without increasing resources.The global insurance
76
industry is bound to contribute towards the growth of world economy and will keep
evolving in the way the other financial markets have done in the past. The study of the
global insurance market reveals that there is a level of saturation reached in the
industrialized countries and the focus has moved to the emerging markets like China
and India.
3.8 LEGAL & REGULATORY ASPECTS OF HEALTH INSURANCE
The Constitution of India has a federal structure i.e. it provides for distribution
of powers between the Union and the States. It enumerates the powers of the
Parliament and State Legislatures in three lists, namely Union list, State list and
Concurrent list. As insurance is included in the Union list, the parliament has the
exclusive legislative empowerment to regulate the insurance industry in India. Thus,
the laws with reference to insurance are uniform throughout the territories of India. As
we have seen earlier, the insurance industry (both life and general) has gone through
the complete cycle from being a free market, to nationalization and then again opened
for private players. The common thread connecting this cycle is the legal framework,
which has also undergone a sea of changes. However, The Insurance Act of 1938
along with various amendments over the years continues till date to be the definitive
piece of legislation on insurance and controls both life insurance and general
insurance.
The general insurance business was nationalized with effect from January 1,
1973, through the introduction of the General Insurance Business (Nationalisation)
Act, 1972 (GIC Act). Under the provisions of the GIC Act, the shares of the existing
Indian general insurance companies and undertakings of other existing insurers were
transferred to the GIC to secure the development of the general insurance business in
India and for the regulation and control of such business. The GIC was established by
the Central Government in accordance with the provisions of the Companies Act,
1956 (Companies Act) in November 1972 and it commenced business on January 1,
1973. Prior to 1973, there were a hundred and seven companies, including foreign
companies, offering general insurance in India. These companies were amalgamated
and grouped into four subsidiary companies of GIC viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd.The Oriental Insurance
Company Ltd. and the United India Assurance Company Ltd. GIC undertakes mainly
re-insurance business apart from aviation insurance. The bulk of the general insurance
77
business of fire, marine, motor and miscellaneous insurance business is under taken
by the four subsidiaries. It was in the year 1993, the Government of India set up an
eight-member committee chaired by Mr. R. N. Mahlhotra1 (commonly called as the
Malhotra Committee), a former Governor of Indias apex bank, the Reserve Bank of
India to review the prevailing structure of regulation and supervision of the insurance
sector and to make recommendations for strengthening and modernizing the
regulatory system. The Committee submitted its report to the Indian Government in
January 1994. Two of the key recommendations of the Committee included the
privatization of the insurance sector by permit ting the entry of private players to enter
the business of life and general insurance and the establishment of an Insurance
Regulatory Authority.
The Indian Parliament passed the Insurance Regulator y and Development
Act, 1999 on December 2, 1999 with the aim to provide for the establishment of an
Authority, to protect the interests of the policy holders, to regulate, promote and
ensure orderly growth of the insurance industry and to amend the Insurance Act,
1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business
(Nationalization) Act,
IRDA has been entrusted with the duty to regulate, promote and ensure the
orderly growth of the insurance and re-insurance business in India. In addition to this,
it has been conferred with numerous powers and functions which include prescribing
regulations on the investments of funds by insurance companies, regulating
maintenance of the margin of solvency, adjudication of disputes between insurers and
intermediaries, supervising the functioning of the Tariff Advisory Committee,
specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organizations and specifying the percentage of
life insurance business and general insurance business to be undertaken by the insurer
in the rural or social sector.
The broad regulatory framework for health insurance business in India
includes: Deposits; Investments; Valuation of Assets Liabilities and Solvency
Margins; Submission of Returns; Actuary; Insurance Advertisements; Obligations
tothe Rural and Social Sector; Assignment and Nomination; Foreign Exchange laws;
Taxation laws and Stamp Duty.
78
In the month of February 2011, IRDA had rolled out the regulation on portability
of health insurance to safeguard the interest of the policyholders. The gist of
guidelines is given below:
All insurers issuing health insurance policies shall allow for credit gained
by the insured for preexisting conditions in terms of waiting period when
insured switches from one insurer to another or from one plan to another,
provided the previous policy has been maintained without break.
This credit shall be limited to the sum assured (including bonus) under the
previous policy.
When policyholder is switching from one insurer to other, Insurers shall
process the proposal with speed and efficiency and all decisions thereof
shall be communicated in writing within a reasonable period not exceeding
15 days from receipt of proposal by the insurer.
If the policy results into discontinuance because of any delay by the
insurer in accepting the proposal, the insurer shall not treat the policy as
discontinuance and shall allow portability.
Insurers shall clearly draw the attention of the policyholder in the policy
contract and the promotional material like prospectus, sales literature etc.
Insurer to share the entire database including the claim details of the
policies where the policyholders has opted for portability with their
counterparts where requested.
All applications for the portability shall be acknowledged by the insurers
within three working days.
Having looked into the external environment including the trends in the Indian
health insurance industry it becomes quite evident that the health insurance sector is
growing at a fast pace and so is the level of competition. The key developments in the
Indian health insurance industry had taken place post the privatization. There are
multiple initiatives taken by the regulator to improve the growth and built trust among
the minds of the policyholders. The standalone health insurance companies are here to
stay and are increasing their market share on a year to year basis. The detariffication
of the insurance industry will help reduce the subsidization offered in health insurance
However, currently the health insurance industry has a claim ratio of more than 100
percent and to ensure that the business is profitable one needs to develop strategies for
79
synergy among insurers and providers, and in doing so it is important to understand
the attitude, interest and concerns of the different stakeholders. The health insurance
industry is highly regulated unlike the healthcare industry and it is important to meet
the needs and expectations of different stakeholders.
3.9 HEALTH INSURANCE SCENARIO IN TAMILNADU
Tamil Nadu is one of the most developing states in India for providing the best
health care with the latest technologies through corporate hospitals and trained
professionals. The awareness amongst the masses about health insurance is equally
growing according to the recent statistics about fifty percentage of population is
covered for health insurance by individual policies, employer sponsored group
insurance scheme, chief ministers health insurance scheme for the poor, state
government sponsored health insurance scheme for government employees, central
government health insurance scheme for weavers, and mediclaim policies sold by
banks for their customers through their tie-up arrangements with insurance
companies.
The chief minister health insurance scheme is becoming popular which
provides a good health care facility to the poor. The most of the ITES companies
based in Chennai and other big corporate are offering health insurance coverage to
their employees. Day by day increasing health cost is one of the reasons for people to
go for health insurance policies.
Most of individual policies are sold by the agents of insurance companies. The
major chunk are around 1.5 crore of the population which is covered through chief
ministers scheme sponsored by the state government. The remaining lot covered by
the group insurance scheme of the employers and Bank assurance. The remaining
50% of the population are untapped potential available for the insurance to sell their
insurance policies. The penetration of insurers still remains low in rural areas where
only the people are covered mostly through state government scheme. The urban
population due to their employment, rising health care cost, high exposure to risks
creates more awareness and enables it to go for higher coverage.
Amongst the stand alone health insurers M/S STAR HEALTH tops the list
followed by APPOLO MUNICH and MAXBUPA. M/S STAR HEALTH being the
earlier state government sponsored insurer launched in 2008 (KALINGER KAPPIDU
THITTAM) have created a brand name for them. Amongst the private sector insurers
80
ICICI tops the list because of their online facility and aggressive marketing employee
group insurance scheme. The united India insurance company based in Chennai
because of their vast network in Tamil Nadu and having snatched the chief ministers
insurance scheme tops the list not only amongst the public sector but also the number
one insurer in health insurance in Tamil Nadu.
3.9.1 Health Insurance In Erode
Erode district is the district in the Kongu Nadu region of the state of Tamil
Nadu, India. Erode district has a population of 2,259,608. The district presently
contains six taluks namely: Anthiyur, Bhavani, Erode, Gobichettipalayam,
Perundurai, and Satyamangalam. Erode district was ranked second in the state for
providing treatment to the people under the Government Insurance Scheme. Health
insurance is fastly emerging as a vital mechanism to finance health care needs of the
people. The need for an insurance system that works on the basic principle of pooling
of risks of unexpected costs of persons falling ill and needing hospitalization by
charging premium from a wider population base of the same community. In Erode
district the National Insurance started in 1979. It covers medical insurance, accident
insurance, it has more than 30,000 customers in Erode district. The United India
Assurance started in the year 1978. It has more than Rs.8000 crores in premium
income. The New India Assurance Company branch was started in Erode district in
the year 1986. Now all health insurance companies have their branches in the Erode
district. Most of the people in Erode district were of the opinion that government
should have a clear policy, through which public can be made to contribute
compulsorily to a health insurance scheme to ensure unnecessary out-of-pocket
expenditures and also better utilization of their health care facilities.
81
TABLE 3.5
POLICIES, INSURED MEMBERS AND CLAIMS
Number of Number of Number of

Year
Policies Members Claims
2003-2004 2265451 8361629 360088
2004-2005 2059449 8987239 555273
2005-2006 3828495 16345575 1016785
2006-2007 3110475 17907430 1060047
2007-2008 3790838 24121625 1436998
2008-2009 4575725 32710604 2081297
2009-2010 6884687 54893453 3263597
2010-2011 7742076 52508111 3843285
2011-2012 7742754.9 58965010 4591434.2
2012-2013 8521143.3 66034778 5325172
2013-2014 9299531.6 73104545 6058909.8
Source: Secondary data
A contract of Insurance is a device to the party in consideration of the price

paid to him in proportionate to the risk which provides security to the other party that
he shall not suffer loss damage or prejudice by the happening of certain specified
events. Insurance is meant to protect the insured against uncertain events which may
cause disadvantage to him. From the above table it is understood that number of
polices of the Insured members and claims are continuously in increasing trend from
the year 2003-04 to 2013-14.
82
FIGURE 3.6
POLICIES, INSURED MEMBERS AND CLAIMS
80000000
70000000
60000000
50000000
40000000
Number of Policies
30000000 Number of Members
Number of Claims
20000000
10000000
83
TABLE 3.6
TOTAL PREMIUM, TOTAL CLAIM PAID AND CLAIM RATIO
Premium (in
Year Claims paid (in Crs.) Claims Paid Ratio %
Crs.)
2003-2004 944 785 83
2004-2005 987 948 96
2005-2006 1947 1777 91
2006-2007 2820 2198 78
2007-2008 2758 2904 105
2008-2009 3976 4087 103
2009-2010 7803 7456 96
2010-2011 10932 10797 99
2011-2012 14061.04 14138 101
2012-2013 17190.08 17479.01 102
2013-2014 20319.11 20820.01 102
In the year 2003 2004 the value of total premium was 944 crores in which
785 crores of claims got paid. It got tremendous increase and reached 3,976 crores in
2008 2009 but 4087 crores of claims got paid. In the year 2010 2011 it reached
10932 crores and it vastly increased to 17190.08 crores in 2012 2013 whereas
17479.01 crores of the claim got paid. Till now it resulted in 20319 crores in the year
of 2013 2014 in which 20820,01 crores of the claims got paid.
84
FIGURE 3.7
TOTAL PREMIUM, TOTAL CLAIM PAID AND CLAIM RATIO
25000
20000
15000
Premium (` in Crs.)
10000
Claims paid (` in Crs.)
5000
85
TABLE 3.7
AVERAGE PREMIUM, AVERAGE CLAIM PAID AND AVERAGE PERSON

INSURED PER POLICY AND PER MEMBER
Premium Number of Claims

Premium per Persons Claim Paid Paid per
Period
per Policy Insured Insured per Policy insured
Member per Policy member
2003-2004 4166 1129 4 3465 939
2004-2005 4792 1098 4 4606 1055
2005-2006 4892 1146 4 4642 1040
2006-2007 9067 1575 6 7066 1227
2007-2008 7275 1143 6 7661 1204
2008-2009 8689 1216 7 8932 1249
2009-2010 11333 1421 8 10910 1368
2010-2011 14120 2082 6 13946 2056
2011-2012 14119 1805 8 13947 2216
2012-2013 15452 1901 8 15356 2375
2013-2014 16785 1997 9 16765 2535
The above table shows that in the year 2003 2004 the premium per policy is
4166 as very low in the initial stage in which only 1129 of the insured members had
premium in which only 939 insured members got paid per claim. It gradually
increased in the following years slightly and attained 7275 premium per policy in
which 1143 of them insured members but only 1204 of them got their claims paid. By
the way it started to increase with the members and reached 14119 members in 2011
2012 but unfortunately 1805 of them only got insured and only 2216 of them got their
claims paid. Finally it attains 16785 members in the year 2013 2014 even though the
population increases the insured members counting increases very slowly as it
reached 1997 currently in which 2535 of them got their claims paid.
86
FIGURE 3.8
AVERAGE PREMIUM, AVERAGE CLAIM PAID AND AVERAGE PERSON INSURED PER POLICY AND PER
MEMBER
18000
16000
14000
12000
10000
Premium per Policy
8000
6000 Premium per Insured
Member
4000
2000
0
87
3.10 CONCLUSION
This chapter concluded with the history of health insurance market in global as well as
the Indian market, and it helps the insurance companies to understand both global and Indian
market. Since health insurance in India is misunderstood as life insurance by a majority of the
population, there is a need to create awareness and educate the people about the importance of
Health Insurance and the various benefits that they can avail.
Reference:
1. Malhotra .N.K. (2007) Marketing Research an Applied Orientation, 5thEdition, Pearson
Publication, New Delhi.
88
CHAPTER IV
ANALYSIS OF CONSUMERS PERCEPTION AND ATTITUDE
TOWARDS HEALTH INSURANCE
4.1 INTRODUCTION
The main objectives of the study is to identify the factors influencing the customers while
purchasing the health insurance policies. The demographic profile of a customer is an important
factor which determines the consumers perception and attitudes. The location, age, gender,
qualification, occupation, marital status, family type, number of dependents, monthly income,
insurance type, sum insured, number of years availing health insurance, renewal status and
nature of health insurance company were included in the questionnaire which helped to
understand the consumer buying decision process and also to know the behavior of the
consumer. This chapter analyzes the above said demographic profiles of the respondents.
4.2 LOCATION WISE AND AGE WISE CLASSIFICATIONS
The table given below show that below table shows that location wise and age wise classification
of the respondents. Totally 650 respondents are taken for the present study. Location and age
wise classification is most important for understanding respondents' demographic details.
Location is classified into urban and rural, age of the respondent's categories into four like below
30 years, 31-40 years, 41-50 years and above 50 years.
TABLE 4.1
LOCATION WISE AND AGE WISE CLASSIFICATIONS
Location Frequency Percentage
Urban 469 72.2
Rural 181 27.8
Total 650 100.0
Age Frequency Percentage
Below 30 years 312 48.0
31-40 years 209 32.2
41-50 years 111 17.1
Above 50 years 18 2.8
89
Total 650 100.0
Source: Primary data
Inference
It is found from the above table that, 72.2% respondents are from urban area and 27.8%
respondents from rural area. 48% respondents belong to 30 years old, 32.2% respondents belong
to 31-40 years, 17.1% respondents belong to 41-50 years old and 2.8% respondents belong to
above 50 years.
It is concluded that 72.2% of the respondents from urban and most 48% of them were 30 years
old. This is because the rural people are not educated and also not much aware of the health
insurance policies.
4.3 GENDER AND QUALIFICATION WISE CLASSIFICATION
Table 4.2 shows gender and educational qualification wise classification. Gender and educational
qualification are main factors in explaining the health insurance selection. Selection of health
insurance may affected by gender and educational qualification. Totally 650 respondents are
taken for study. Educational qualification is classified into four categories like school, graduates,
post graduate and professional degree.
TABLE 4.2
GENDER AND QUALIFICATION WISE CLASSIFICATION
Gender Frequency Percentage
Male 368 56.6
Female 282 43.4
Total 650 100.0
Qualification Frequency Percentage
School 133 20.5
Graduate 355 54.6
Post graduate 82 12.6
Professional degree 80 12.3
Total 650 100.0
90
Inference
Table 4.2 shows that 56.6% respondents are male and 43.4% respondents are female. 20.5%
respondents have school level educational qualification, 54.6% respondents have UG level
educational qualification, 12.6% respondents have PG level educational qualification and 12.3%
respondents possess professional degrees.
It is concluded that 56.6% respondents are male and most 54.6% have UG level educational
qualification as the educational institutions influence them about their physical and mental health
and also they had much more external exposure in society than females at their occupational
area.
4.4 OCCUPATION WISE CLASSIFICATION
The table 4.3 shows the occupation wise classification of the respondents. Totally 650
respondents are taken for the present study. Occupation wise classification is most important for
understanding respondents' demographic details and it has high level impact on health insurance
selection. Occupation is classified into six categories like self-employed, professional,
government, employed in private concern, agriculture and others.
TABLE 4.3
OCCUPATION WISE CLASSIFICATION
Occupation Frequency Percentage
Self employed 124 19.1
Professional 99 15.2
Government 201 30.9
Employed in private concern 115 17.7
Agriculture 17 2.6
Others 94 14.5
Total 650 100.0
Inference
The table given above shows that 19.1% respondents are self-employed, 15.2% respondents are
professionals, 30.9% respondents are government employees, 17.7% respondents are working in
91
private concern, 14.5% respondents are doing agricultural work and 2.6% respondents are doing
other kind of works.
It is concluded that 30.9% respondents were government employees as the government norms
were understood easily by them because of their awareness about insurance, which was not
effectively provided in private concern.
FIGURE 4.1
OCCUPATION WISE CLASSIFICATION
30.9
19.1 17.7
15.2 14.5
2.6
4.5 MARITAL STATUS AND FAMILY TYPE WISE CLASSIFICATION

The below table 4.4 shows the marital status and family type wise classification of the
respondents. Totally 650 respondents are taken for the present study. Marital status and family
type also show significant impact on health insurance selection. Marital status is classified into
married and unmarried categories and family type is classified into two categories joint
family and nuclear family.
TABLE 4.4
MARITAL STATUS AND FAMILY TYPE WISE CLASSIFICATION
Marital status Frequency Percentage
92
Married 596 91.7
Unmarried 54 8.3
Total 650 100.0
Family type Frequency Percentage
Joint family 312 48.0
Nuclear family 338 52.0
Total 650 100.0
Inference
The table above table shows that 91.7% respondents were married and 8.3% respondents were
unmarried.48% respondents belong to joint family and 52% respondents belong to nuclear
family.
It is concluded that 91.7% respondents were married as they were much more conscious about
their family health almost rather than the individuals and almost 52% belong to nuclear family
due to the modern culture and also the socio-economic change influencing them to be
independent and idle.
4.6 NUMBER OF DEPENDENTS
The below table 4.5 shows the number of dependents wise classification of the respondents.
Totally 650 respondents are taken for the present study. Number of dependents in family also
shows significant impact on health insurance selection. Number of dependents is classified into
categories like 1-2 members, 2-3 members, 3-4 members and above 4
members.
TABLE 4.5
NUMBER OF DEPENDENTS
Dependents Frequency Percentage
1-2 members 306 47.1
2-3 members 155 23.8
3-4 members 50 7.7
Above 4 members 139 21.4
93
Total 650 100.0
Inference
The table above infers that 47.1% respondents have 1-2 members in their family, 23.8%
respondents have 2-3 members in their family, 7.7% respondents have 3-4 members in their
family and 21.4% respondents have more than 4 members in their family.
It is concluded that 47.1% respondents have 1-2 members in their family due to the public
awareness about family planning created by the government and health care organizations about
the over population which is a major cause for scarcity of the resources and unfulfilled needs.
94
4.7 MONTHLY INCOME WISE CLASSIFICATION
The table given below 4.6 shows the monthly income classification of the respondents. Totally
650 respondents are taken for the present study. Monthly income also shows significant impact
on health insurance selection. Because based on monthly income, most of the respondents
selected the premium amount of the health insurance. Monthly income is classified into
categories like up to Rs.10000, Rs.10001-20000, Rs.20001-30000 and Rs.30001-50000.
TABLE 4.6
MONTHLY INCOME WISE CLASSIFICATION
Monthly income Frequency Percentage
Up to Rs.10000 33 5.1
Rs.10001-20000 174 26.8
Rs.20001-30000 237 36.5
Rs.30001-50000 206 31.7
Total 650 100.0
Inference
The above table shows that 5.1% respondents are getting up to Rs.10000, 26.8% respondents are
getting Rs.10001-20000 as a monthly income, 36.5% respondents are getting Rs.20001-30000
and 31.7% respondents are getting Rs.30001-50000 as a monthly income.
It is found that of 36.5% the respondent monthly income range is between Rs.20001-30000 as
most of them were employed in government institutions.
4.8 INSURANCE TYPE
The table 4.7 shows the insurance type wise classification of the respondents. Totally 650
respondents are taken for the present study. Insurance type also shows significant impact on
health insurance selection. Because normally insurance type is based on family income, family
size and family type. Insurance type is classified into categories like individual, family and
group insurance.
95
TABLE 4.7
INSURANCE TYPE
Insurance type Frequency Percentage
Individual 117 18.0
Family 148 22.8
Group 385 59.2
Total 650 100.0
Inference
The Above table shows that 18% respondents are using health insurance policy for individuals,
22.8% respondents are using health insurance policy for family, 59.2% respondents are using
health insurance policy for group.
It is found that majority of (59.2%) of respondents were using health insurance policy for
group.
4.9 SUM INSURED UNDER THE HEALTH IN SURANCE POLICY
The table 4.8 shows the sum insured wise classification of the respondents. Totally 650
respondents are taken for the present study. Sum insured is also shows significant impact on
health insurance selection. Because normally sum insured is based on family income. Sum
insured is classified into categories like Rs.100000-200000, Rs.200000-300000,
Rs.300000-400000 and Rs.400000-500000.
TABLE 4.8
SUM INSURED UNDER THE HEALTH INSURANCE POLICY
Sum insured Frequency Percentage
Rs.100000-200000 117 18.0
Rs.200000-300000 148 22.8
Rs.300000-400000 211 32.5
Rs.400000-500000 174 26.8
Total 650 100.0
96
Inference
Above table infers that 18% respondents insured sum of Rs.100000-200000, 22.8% respondents
insured sum of Rs.200000-300000, 32.5% respondents insured sum of Rs.300000-400000 and
26.8% respondents insured sum of Rs.400000-500000 under the health insurance policy.
It is concluded that 32.5% the respondent insured sum of Rs.300000-400000 under the health
insurance policy because most of them were government employees. They choose their
insurance policies according to their monthly income which influenced them in selecting the type
of policy provided by the health insurance companies.
4.10 NUMBER OF YEARS AVAILING HEALTH INSURANCE
The table 4.9 shows the number of years availing health insurance wise classification of the
respondents. Totally 650 respondents are taken for the present study. Number of years availing
health insurance also shows significant impact on health insurance selection. Because normally
number of years availing health insurance is based on gender and age of the respondents.
Number of years availing health insurance is classified into categories like one year, two to
three years, and and four to five years and above five years.
TABLE 4.9
NUMBER OF YEARS AVAILING HEALTH INSURANCE
Number of years availing health insurance Frequency Percentage
One year 282 43.4
Two to three years 164 25.2
Four to five years 79 12.2
Above five years 125 19.2
Total 650 100.0
Inference
Above table infers that 43.4% respondents avail health insurance policy for one year, 25.2%
respondents avail health insurance policy for two to three years, 12.2% respondents avail health
insurance policy for four to five years and 19.2% respondents avail health insurance policy for
above five years.
97
It is concluded that 43.4% respondent are availing health insurance policy for one year. Most of
them were in group policies and also not aware of the renewal procedure and benefits.
4.11 RENEWAL STATUS OF HEALTH INSURANCE POLICY

The table 4.10 shows that renewal status of health insurance wise classification of the
respondents. Totally 650 respondents are taken for the present study. Renewal status of health
insurance also shows significant impact on health insurance selection. Because normally renewal
status of health insurance is based on monthly income and occupation of the respondents.
Renewal status of health insurance is classified into categories like regular, discontinued and gap
in renewal.
TABLE 4.10
RENEWAL STATUS OF HEALTH INSURANCE POLICY
Renewal status Frequency Percentage
Regular 81 12.5
Discontinued 409 62.9
Gap in renewal 160 24.6
Total 650 100.0
Inference
The table 4.10 infers that 12.5% respondents are regularly renewing their health insurance
policy, 62.9% respondents discontinue their health insurance policy and 24.6% respondents give
a gap in renewing their health insurance policy.
It is concluded that maximum of 62.9% the respondents discontinued renewing their health
insurance policy.
4.12 NATURE OF HEALTH INSURANCE COMPANY
The table below shows that the nature of health insurance company wise classification of the
respondents. Totally 650 respondents are taken for the present study. Nature of Health Insurance
Company also shows significant impact on health insurance selection. Because normally nature
of health insurance company is based on monthly income and occupation of the respondents.
98
Nature of Health Insurance Company is classified into categories like government insurance
company, private insurance company and standalone insurance company.
TABLE 4.11
NATURE OF HEALTH INSURANCE COMPANY
Nature of Health Insurance Company Frequency Percentage
Government insurance company 220 33.8
Private insurance company 289 44.5
Stand alone insurance company 141 21.7
Total 650 100.0
Inference
The table 4.11 infers that 33.8% respondents chose government based insurance companies,
44.5% respondents nature of private insurance companies and 21.7% respondents used stand
alone insurance companies.
It is concluded that maximum of 44.5% the respondent are insured in private insurance
companies as the agents are approaching them directly and influencing them by explaining the
norms and benefits. The advertisement plays more important role in influencing the customers
towards the private health insurance companies than towards government insurance
organizations.
TABLE 4.12
OPINION ABOUT SOURCE OF AWARENESS
Source of awareness Rank Mean SD Skewness Kurtosis

Advertisement 5 3.30 1.40 -0.18 -1.31
Friends and relatives 6 3.28 1.30 -0.21 -1.09
99
TV 9 3.21 1.24 -0.22 -0.86
Employer 3 3.33 1.28 -0.26 -1.02
Brochures & pamphlets 9 3.21 1.32 -0.25 -1.07
Insurance agent 2 3.36 1.28 -0.25 -1.00
Hospital 1 3.38 1.26 -0.22 -1.04
Educational institution 4 3.32 1.21 -0.29 -0.86
NGO 7 3.24 1.23 -0.12 -0.86
4.13 INFERENCE
The table given above infers that hospitals are the main source for creating awareness about the
health insurance companies (3.38), insurance agent is second ranked source that created
awareness about the health insurance company (3.36), employers of the respondents are the third
ranked source of awareness about the health insurance companies (3.33), educational institutions
are the fourth ranked sources (3.32), advertisements about the health insurance companies are the
fifth source (3.30), friends and relatives are the sixth ranked source (3.28), NGOs are the seventh
ranked source of creating awareness about health insurance companies (3.24), televisions,
broachers & pamphlets are the last ranked source of awareness, factors for health insurance
companies.
It is concluded that the hospitals creating the awareness about the health insurance policies in
both the urban and rural customers, by which the agents approach and get them known about the
health insurance companies and the health insurance policies along with their benefits, terms and
conditions.
FIGURE 4.2
OPINION ABOUT SOURCE OF AWARENESS
100
NGO 3.24
Educational institution 3.32
Hospital 3.38
Insurance agent 3.36
Broachers & pamphlets 3.21
Employer 3.33
TV 3.21
Friends and relatives 3.28
Advertisement 3.30
TABLE 4.13
OPINION ABOUT PURCHASE INTENTION OF HEALTH INSURANCE POLICY
Purchase intention Rank Mean SD Skewness Kurtosis

To meet medical expenses 1 3.50 1.24 -0.36 -0.96
Fear of disease 3 3.48 1.18 -0.31 -0.84
Medical expenses are high 13 3.30 1.23 -0.25 -0.90
Agent 11 3.32 1.22 -0.21 -0.89
Employer 6 3.37 1.25 -0.33 -0.95
For foreign travel / trip 6 3.37 1.28 -0.29 -1.04
Due to age 9 3.33 1.22 -0.23 -0.88
Family history 3 3.48 1.24 -0.34 -0.95
To avoid risk 9 3.33 1.29 -0.30 -0.93
101
Protection 6 3.37 1.25 -0.34 -0.91
Prone (for disease) 11 3.32 1.23 -0.17 -0.96
Bank 14 3.27 1.20 -0.23 -0.78
Tax exemption 6 3.37 1.22 -0.21 -1.02
Student 12 3.31 1.25 -0.19 -0.95
Fear due to part experience 15 3.25 1.30 -0.32 -0.99
Inference
The table given above shows that meeting medical expenses is the first ranked purchase
intention factor with the mean value of 3.50, family history and fear of disease is the third
ranked factor, tax exemption, protection, for foreign travel / trip and employer are the
sixth ranked purchase intention factors with the mean value of 3.37, avoid risk and due to
age are the ninth ranked purchase intention facets with the mean value of 3.33, agent and
prone (for disease) is the eleventh ranked purchase intention factor with the mean value of
3.32, student is the next ranked factor with mean value of 3.31, medical expenses are high,
bank and fear due to part experience are the last ranked purchase intention factors with the
mean value of 3.302, 3.30 and 3.25.
FIGURE 4.3
OPINION ABOUT PURCHASE INTENTION OF HEALTH INSURANCE POLICY
102
To meet out medical expenses
Fear on disease
3.50
Medical expenses are high
Agent 3.48
3.30
Employer
3.32
For foreign travel / trip
Due to age
3.373.37
Family history
3.33
To avoid risk
3.48
Protection
3.33
Prone (for disease)

3.37
103
Bank
3.32
Tax exemption
3.27
Student
3.37
Fear due to part experience

3.31
3.25
Series1
TABLE 4.14
OPINION ABOUT REASON FOR SWITCH OVER
Switch Over Rank Mean SD Skewness Kurtosis

Poor follow up 3 3.93 0.93 -0.67 -0.05
Poor servicing 10 3.53 1.15 -0.62 -0.20
Poor claim settlement 11 3.52 1.24 -0.39 -1.02
Delay 7 3.68 1.25 -0.62 -0.80
Deductions 8 3.64 1.09 -0.61 -0.17
Unnecessary queries 6 3.75 1.12 -0.43 -1.05
Too much of documentation 12 3.50 1.09 -0.40 -0.40
Not satisfied with agent 1 4.13 0.87 -0.80 0.01
Better scheme 5 3.83 1.02 -0.46 -0.85
Attractive premium 13 3.40 1.17 -0.25 -0.88
Competitive premium 2 3.99 0.95 -0.93 0.77
Transparency 6 3.75 1.07 -0.36 -1.04
Better benefits 9 3.63 1.12 -0.26 -1.21
Inference
The table 4.14 shows that Not satisfaction with the agents is the top ranked switch over cost
with the mean value of 4.13, competitive premium is the second top ranked switch over cost
with the mean value of 3.99, poor follow up is the third ranked switch over cost with the mean
value of 3.93, better schemes is the fourth ranked switch over cost with the mean value of
3.83, transparency and unnecessary queries are the fifth ranked switch over cost with the
mean value of 3.75, delay and deductions are the sixth and seventh ranked switch over cost
with the mean value of 3.68 and 3.64. Better benefits and poor servicing are the eighth and
ninth ranked switch over cost value of with mean value of 3.63 and 3.53. Poor claim
settlement, Poor claim settlement and attractive premiums are the last ranked switch over
cost with the mean value of of 3.52, 3.50 and 3.40.
104
FIGURE 4.4
OPINION ABOUT REASON FOR SWITCH OVER
105
4.13
3.99
3.83
3.68 3.64 3.75 3.75
3.63
3.53 3.52 3.50
3.40
106
TABLE 4.15
OPINION ABOUT CUSTOMER SATISFACTION
Customer satisfaction Rank Mean SD Skewness Kurtosis

Claim processing 1 3.51 1.23 -0.45 -0.83
Customer service 5 3.32 1.27 -0.25 -1.07
Value of the money 8 3.29 1.30 -0.29 -1.07
Financial strength 2 3.41 1.32 -0.40 -1.04
Image of the company 3 3.39 1.27 -0.27 -1.05
Trustworthy and honesty of agents 5 3.32 1.32 -0.29 -1.06
Problem solving 7 3.30 1.29 -0.25 -1.07
Attractive Premium 9 3.28 1.28 -0.20 -1.07
Different variety of plans 10 3.21 1.23 -0.17 -0.97
Better benefits 7 3.30 1.32 -0.31 -1.08
Inference
Table 4.15 shows that claim processing is the top ranked customer satisfaction factor with the
mean value of 3.51, financial strength of the insurance company is the second ranked customer
satisfaction factor with the mean value of 3.41. Image of the health insurance company is the
third ranked customer satisfaction factor with the mean value of 3.39, customer service and
trustworthy and honesty of the insurance agents are the fifth ranked customer satisfaction
factor with the mean value of 3.32. Problem solving by the health insurance company, better
benefits offered by the health insurance company is the seventh ranked customer satisfaction
factor with the mean value of 3.30. Value of the money is the eighth ranked customer
satisfaction factor with the mean value of 3.29, attractive premium is the ninth ranked
customer satisfaction factor with the mean value of 3.28 and different variety of plans and
better schemes are the last ranked customer satisfaction factor with the mean value of 3.21.
107
It is concluded that the most of the respondents satisfaction was depending on claim processing
and customer services. The customer satisfaction in health insurance depends upon the procedure
of claim processing followed by the health insurance companies and also the quality of services
offered to the customers.
FIGURE 4.5
OPINION ABOUT CUSTOMER SATISFACTION
108
3.51
3.41
3.39
3.32 3.32
3.29 3.30 3.30
3.28
3.21
109
4.14 LOCATION OF RESPONDENTS AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
The source of awareness is the important factor which influences the customers to take decision
regarding choosing the health insurance policy. In this research the following are the source of
awareness for health insurance they are advertisement, TV, friends and relatives, employer,
insurance agents, hospital, educational institution and NGO. The t-test is administered to test the
following hypothesis.
H01: There is no difference between locations of the respondents with respect to different source
of awareness for health insurance companies.
TABLE 4.16
LOCATION OF RESPONDENTS AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
t-test for Equality of Means
Independent Samples Test
t df Sig. (2-tailed)
Advertisement -1.210 648 0.227
Friends and relatives -0.928 648 0.354
TV -0.733 648 0.464
Employer -0.901 648 0.368
Brochures & pamphlets 1.006 648 0.315
Insurance agent -0.791 648 0.429
Hospital -2.687 648 0.007**
Educational institution -1.237 648 0.216
NGO -0.266 648 0.791
Note: ** significance at 5 %
Inference
Table 4.16 shows that p value is greater than 0.05 for all the sources of awareness variables
except hospital. Hence null hypothesis accepted. It is concluded that there is no difference
between locations of the respondents with respect to advertisement, friends and family, TV,
employer, brochures and pamphlets, insurance agents, educational institutions and NGO. Since p
110
value is less than 0.05 for hospitals, it is concluded that there is a difference between locations of
the respondents with respect to hospitals as the source of awareness for health insurance
companies.
The t-test result, show that the customer knows the importance of health insurance through the
hospital. The hospital is the important source of awareness about health insurance companies and
their policies for the customers. The location of the respondents with respect to hospitals has no
variation due to the source of awareness for health insurance companies.
4.15 AGES OF THE RESPONDENTS AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
regarding choosing the health insurance policy. In this research the following are the sources of
awareness for health insurance; they are: advertisement, TV, friends and relatives, employer,
insurance agents, hospital, educational institution and NGO. The ANOVA is administered to test
the following hypothesis.
H02: There is no difference between ages of the respondents with respect to different source of
awareness for health insurance companies.
111
TABLE 4.17
AGES OF THE RESPONDENTS AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
Sum of Mean
ANOVA df F Sig.
Squares Square
Between Groups 10.98 3 3.66 1.86 0.13
Advertisement Within Groups 1269.92 646 1.97
Total 1280.90 649
Between Groups 3.45 3 1.15 0.68 0.56
Friends and
Within Groups 1090.46 646 1.69
relatives
Total 1093.91 649
Between Groups 3.51 3 1.17 0.76 0.52
TV Within Groups 997.45 646 1.54
Total 1000.96 649
Between Groups 4.81 3 1.60 0.99 0.40
Employer Within Groups 1051.08 646 1.63
Total 1055.88 649
Between Groups 1.72 3 0.57 0.33 0.80
Broachers &
pamphlets
Total 1126.12 649
Between Groups 15.79 3 5.26 3.25 0.02**
Insurance agent Within Groups 1046.25 646 1.62
Total 1062.04 649
Between Groups 3.26 3 1.09 0.69 0.56
Hospital Within Groups 1020.58 646 1.58
Total 1023.85 649
Educational Between Groups 2.14 3 0.71 0.49 0.69
institution Within Groups 945.30 646 1.46
112
Total 947.44 649
Between Groups 2.21 3 0.74 0.49 0.69
NGO Within Groups 973.90 646 1.51
Total 976.11 649
Inference
Table 4.17 shows that p value is less than 0.05 for insurance agents. Hence null hypothesis is
rejected. It concludes that there is a difference between ages of the respondents with respect to
insurance agents. Remaining variables dont have difference between ages of the respondents
with respect to different source of awareness for health insurance companies.
Ages of the respondents are classified as below 30, 31-40, 41-50, above 50 in this study. The
ANOVA results show that health insurance agent is the important source of awareness for the
different age groups of the respondents. The health insurance companies identify which age
group of customers can be persuaded through the health insurance agents. The health insurance
company agents should focus on all age group members.
4.16 GENDER OF RESPONDENTS AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
H03: There is no difference between gender of the respondents with respect to different source of
113
TABLE 4.18
GENDER OF RESPONDENT AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
Independent Samples Test t-test for Equality of Means

T Df Sig. (2-tailed)
Advertisement -0.62 648 0.54
Friends and relatives 0.54 648 0.59
TV 1.12 648 0.26
Employer 0.7 648 0.48
Insurance agent 1.48 648 0.14
Hospital -0.54 648 0.59
Educational institution -0.57 648 0.57
NGO 1.29 648 0.2
Inference
Above table shows that p value is greater than 0.05 for all the sources of awareness variables.
Hence null hypothesis is accepted. It is concluded that there is no difference between gender of
the respondents with respect to advertisement, friends and family, TV, employer, broachers and
pamphlets, insurance agents, educational institutions, hospitals and NGO.
The T test results show that source of awareness by health insurance companies is not
distinguished for the sake of difference in gender. Both male and female respondents are mostly
educated to be aware and gather information about the health insurance companies and its
policies.
4.17 EDUCATIONAL QUALIFICATION AND SOURCE OF AWARENESS FOR
HEALTH INSURANCE COMPANIES
114
H04: There is no difference between educational qualifications of the respondents with respect to
different sources of awareness for health insurance companies.
TABLE 4.19
EDUCATIONAL QUALIFICATION AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
ANOVA Sum of Df Mean F Sig.

Squares Square
Advertisement Between Groups 3.26 3 1.09 0.55 0.65
Total 1280.90 649
Friends and Between Groups 5.79 3 1.93 1.15 0.33
relatives Within Groups 1088.13 646 1.68
Total 1093.91 649
TV Between Groups 0.94 3 0.31 0.20 0.89
Total 1000.96 649
Employer Between Groups 1.94 3 0.65 0.40 0.76
Total 1055.88 649
Broachers & Between Groups 0.56 3 0.19 0.11 0.96
pamphlets Within Groups 1125.57 646 1.74
Total 1126.12 649
Insurance agent Between Groups 2.79 3 0.93 0.57 0.64
Total 1062.04 649
Hospital Between Groups 3.11 3 1.04 0.66 0.58
Total 1023.85 649
Total 947.44 649
115
NGO Between Groups 1.30 3 0.43 0.29 0.83
Total 976.11 649
Inference
The table 4.19 given above shows that p value is greater than 0.05 for all the sources of
awareness variables. Hence null hypothesis accepted. It is concluded that there is no difference
between qualification of the respondents with respect to advertisement, friends and family, TV,
employer, broachers and pamphlets, insurance agents, educational institutions, hospitals and
NGO.
Move ever, it is concluded that the source of awareness is not varying according to the
educational qualification of the respondents by the health insurance companies. The health
insurance companies reach the customers through their health insurance agents who can explain
all the norms to them and create the awareness at their door step.
4.18 OCCUPATION AND SOURCE OF AWARENESS FOR HEALTH INSURANCE
COMPANIES
H05: There is no difference between occupations of the respondents with respect to different
source of awareness for health insurance companies.
116
TABLE 4.20
OCCUPATION AND SOURCE OF AWARENESS FOR HEALTH INSURANCE

COMPANIES
ANOVA Sum of df Mean F Sig.
Squares Square
Advertisement Between Groups 32.41 5 6.48 3.34 0.01**
Total 1280.90 649
Friends and Between Groups 14.05 5 2.81 1.68 0.14
Total 1093.91 649
TV Between Groups 13.31 5 2.66 1.74 0.12
Total 1000.96 649
Employer Between Groups 5.35 5 1.07 0.66 0.66
Total 1055.88 649
Broachers & Between Groups 16.26 5 3.25 1.89 0.09
Total 1126.12 649
Insurance agent Between Groups 7.69 5 1.54 0.94 0.45
Total 1062.04 649
Hospital Between Groups 10.30 5 2.06 1.31 0.26
Total 1023.85 649
117
Total 947.44 649
NGO Between Groups 9.24 5 1.85 1.23 0.29
Total 976.11 649
Inference
The table 4.20 shows that p value is less than 0.05 for advertisement about insurance company
and policy. Hence null hypothesis is rejected. It concludes that there is a difference between
occupation of the respondents with respect to advertisement about insurance company and
policy. Remaining variables do not have difference between ages of the respondents with respect
to different source of awareness for health insurance companies.
The ANOVA results shows that the advertisement by the health insurance companies acts as the
major factor influencing the various respondents according to their respective occupations. The
advertisement varies according to the occupation and age groups which attract them towards the
health insurance companies.
4.19 MARITAL STATUS AND SOURCE OF AWARENESS ABOUT HEALTH
INSURANCE COMPANIES
H05: There is no difference between marital status of the respondent with respect to different
118
TABLE 4.21
MARITAL STATUS AND SOURCE OF AWARENESS ABOUT HEALTH INSURANCE

COMPANIES

Advertisement -3.23 648 0.00**
TV 0.14 648 0.89
Employer 0.21 648 0.84
Brochures & pamphlets -0.93 648 0.35
Hospital 0.54 648 0.59
Educational institution 0.86 648 0.39
NGO 2.12 648 0.03
Inference
The table 4.21 shows the shows that p value is less than 0.05 for advertisement about insurance
company and policy. Hence null hypothesis rejected. It concludes that there is a difference
between marital status of the respondents with respect to advertisement about insurance company
and policy. Remaining variables do not have difference between ages of the respondents with
respect to different source of awareness for health insurance companies.
The t-test result shows that most of the married and unmarried consumers are taking decision on
the basis of health insurance companies advertisement. It is concluded that the type of marital
status of the respondent is influenced by the health insurance companies through their
advertisement. The insurance companies should give proper advertisement to attract married and
unmarried customers.
119
4.20 FAMILY TYPES AND SOURCE OF AWARENESS FOR HEALTH INSURANCE
COMPANIES
H07: There is no difference between family types of the respondents with respect to different
TABLE 4.22
FAMILY TYPES AND SOURCE OF AWARENESS FOR HEALTH INSURANCE

COMPANIES

Sig.
t df
(2-tailed)
Advertisement 1.84 648 0.07
TV -0.30 648 0.76
Employer 1.53 648 0.13
Hospital 0.75 648 0.45
Educational institution 1.12 648 0.27
NGO 0.75 648 0.46
Inference
The table 4.22 shows the p value is greater than 0.05 for all the sources of awareness variables.
Hence null hypothesis is accepted. It concludes that there is no difference between family type of
120
the respondents with respect to advertisement, friends and family, TV, employer Brochures and
The researcher classified the type of family as group family and nuclear family. The t test
result shows that the source of awareness by the health insurance companies is not influencing
according to the type of family of their respondents. Both nuclear and group families were aware
about the policies provided by the health insurance companies.
4.21 DEPENDENTS OF THE RESPONDENTS AND SOURCE OF AWARENESS FOR
H08: There is no difference between numbers of dependents of the respondents with respect to
different source of awareness for health insurance companies.
Table 4.23
DEPENDENTS OF THE RESPONDENTS AND SOURCE OF AWARENESS FOR


Squares Square
Advertisement Between Groups 5.530 3 1.843 .934 .424
Within Groups 1275.369 646 1.974
Total 1280.898 649
Friends and Between Groups .536 3 .179 .106 .957
Total 1093.914 649
TV Between Groups 4.387 3 1.462 .948 .417
Within Groups 996.575 646 1.543
Total 1000.962 649
Employer Between Groups .689 3 .230 .141 .936
Within Groups 1055.195 646 1.633
Total 1055.885 649
121
Squares Square
Brochures & Between Groups .495 3 .165 .095 .963
Total 1126.125 649
Insurance agent Between Groups 3.183 3 1.061 .647 .585
Within Groups 1058.856 646 1.639
Total 1062.038 649
Hospital Between Groups 2.841 3 .947 .599 .616
Within Groups 1021.005 646 1.581
Total 1023.846 649
Educational Between Groups 9.810 3 3.270 2.253 .081
Total 947.440 649
NGO Between Groups 9.367 3 3.122 2.087 .101
Within Groups 966.739 646 1.496
Total 976.106 649
Inference
The table 4.23 shows that p value is greater than 0.05 for all the sources of awareness variables.
Hence null hypothesis is accepted. It is concluded that there is no difference between number of
dependents of the respondents with respect to advertisement, friends and family, TV, employer,
broachers and pamphlets, insurance agents, educational institutions, hospitals and NGO.
The number of dependents of the respondents are classified as 1-2, 2-3, 3-4,and above 4
members in this study. The ANOVA result shows that any type of source of awareness by the
health insurance companies is not influencing according to the number of dependents of their
respondents.
4.22 MONTHLY INCOME AND SOURCE OF AWARENESS FOR HEALTH

INSURANCE COMPANIES
122
H09: There is no difference between monthly income of the respondents with respect to different
TABLE 4.24
MONTHLY INCOME AND SOURCE OF AWARENESS FOR HEALTH INSURANCE
COMPANIES
Squares Square
Advertisement Between Groups 6.764 3 2.255 1.143 .331
Within Groups 1274.134 646 1.972
Total 1280.898 649
Friends and Between Groups 9.310 3 3.103 1.848 .137
Total 1093.914 649
TV Between Groups 9.596 3 3.199 2.084 .101
Within Groups 991.365 646 1.535
Total 1000.962 649
Employer Between Groups 5.947 3 1.982 1.220 .302
Within Groups 1049.937 646 1.625
Total 1055.885 649
Brochures & Between Groups 9.601 3 3.200 1.852 .137
Total 1126.125 649
Insurance agent Between Groups .899 3 .300 .183 .908
Within Groups 1061.139 646 1.643
Total 1062.038 649
Hospital Between Groups 6.780 3 2.260 1.436 .231
Within Groups 1017.066 646 1.574
Total 1023.846 649
Total 947.440 649
Within Groups 971.272 646 1.504
Total 976.106 649
123
Inference
The table 4.24 shows that the p value is greater than 0.05 for all the sources of awareness
variables. Hence null hypothesis is accepted. It is concluded that there is no difference between
monthly income of the respondents with respect to advertisement, friends and family, TV,
NGO.
The respondents are grouped on the basis of range of monthly income in which most of them
were government employees getting Rs.20000 30000 as a monthly income. It is concluded that
any type of source of awareness by the health insurance companies is not influencing according
to the monthly income of their respondents.
4.23 TYPE OF INSURANCE AND SOURCE OF AWARENESS FOR HEALTH
INSURANCE COMPANIES
H10: There is no difference between type of insurance with respect to different source of
124
TABLE 4.25
TYPE OF INSURANCE AND SOURCE OF AWARENESS FOR HEALTH INSURANCE
COMPANIES

Squares Square
Advertisement Between Groups 2.110 2 1.055 .534 .587
Within Groups 1278.788 647 1.976
Total 1280.898 649
Friends and Between Groups 13.140 2 6.570 3.933 .020**
Total 1093.914 649
Within Groups 994.114 647 1.536
Total 1000.962 649
Employer Between Groups .226 2 .113 .069 .933
Within Groups 1055.659 647 1.632
Total 1055.885 649
Brochures & Between Groups 3.319 2 1.659 .956 .385
Total 1126.125 649
Insurance agent Between Groups 4.537 2 2.269 1.388 .250
Within Groups 1057.501 647 1.634
Total 1062.038 649
Within Groups 1018.528 647 1.574
Total 1023.846 649
Educational Between Groups 15.179 2 7.589 5.267 .005**
Total 947.440 649
Within Groups 969.675 647 1.499
Total 976.106 649
125
Inference
Since p value is less than 0.05 for educational institutions, friends and relatives, hence null
hypothesis is rejected for educational institutions, friends and relatives. It concludes that there is
a difference between type of insurance with respect to educational institutions, friends and
relatives.
The researcher classified the type of insurance policy as individual and group. It is found that the
respondents were influenced by their corresponding educational institutions, friends and relatives
to choose their type of insurance provided by the health insurance companies. They prefer the
group policy rather than the individual policy.
4.24 SUM INSURED AND SOURCE OF AWARENESS FOR HEALTH INSURANCE
COMPANIES
H11: There is no difference between sum insured under the health insurance policy with respect
to different source of awareness for health insurance companies.
126
TABLE 4.26
SUM INSURED AND SOURCE OF AWARENESS FOR HEALTH INSURANCE

COMPANIES

Squares Square
Advertisement Between Groups 2.254 3 .751 .380 .768
Within Groups 1278.644 646 1.979
Total 1280.898 649
Friends and Between Groups 13.508 3 4.503 2.692 .045**
Total 1093.914 649
Within Groups 992.616 646 1.537
Total 1000.962 649
Employer Between Groups 3.218 3 1.073 .658 .578
Within Groups 1052.667 646 1.630
Total 1055.885 649
Total 1126.125 649
Insurance agent Between Groups 4.740 3 1.580 .965 .409
Within Groups 1057.298 646 1.637
Total 1062.038 649
Within Groups 1017.528 646 1.575
Total 1023.846 649
Educational Between Groups 22.377 3 7.459 5.209 .001**
Total 947.440 649
Within Groups 969.530 646 1.501
Total 976.106 649
Inference
127
Since p value is less than 0.05 for educational institutions, friends and relatives, hence null
hypothesis is rejected for educational institutions, friends and relatives. It concludes that there is
a difference between sum insured under the health insurance policy with respect to educational
institutions, friends and relatives.
It is found that the majority of the respondents were influenced by their corresponding
educational institutions, friends and relatives to invest the sum of insured amount under the
policy provide by the health insurance companies. The agents should take care of the policies
and the number of the respondents and also have to follow up them regularly. The agents also
have to remember them periodically about the renewal status.
4.25 NUMBER OF YEARS AVAILING THE POLICY AND SOURCE OF AWARENESS
FOR HEALTH INSURANCE COMPANIES
H12: There is no difference between number of years availing the health insurance policy with
respect to different source of awareness for health insurance companies.
128
TABLE 4.27
NUMBER OF YEARS AVAILING THE POLICY AND SOURCE OF AWARENESS


Squares Square
Within Groups 1274.863 646 1.973
Total 1280.898 649
Friends and Between Groups 5.024 3 1.675 .994 .395
Total 1093.914 649
Within Groups 992.029 646 1.536
Total 1000.962 649
Employer Between Groups 1.424 3 .475 .291 .832
Within Groups 1054.461 646 1.632
Total 1055.885 649
Brochures & Between Groups 1.275 3 .425 .244 .866
Total 1126.125 649
Insurance agent Between Groups 2.834 3 .945 .576 .631
Within Groups 1059.204 646 1.640
Total 1062.038 649
Hospital Between Groups 2.947 3 .982 .622 .601
Within Groups 1020.899 646 1.580
Total 1023.846 649
Total 947.440 649
Within Groups 967.536 646 1.498
Total 976.106 649
Inference
129
The table 4.27 shows that the p value is greater than 0.05 for all the sources of awareness
variables. Hence null hypothesis is accepted. It concludes that there is no difference between
number of years availing the health insurance policy with respect to advertisement, friends and
family, TV, employer, broachers and pamphlets, insurance agents, educational institutions,
hospitals and NGO.
The researcher categorized the insurance policies according to the number of years availing from
one to five years of policies. Most of the customers choose the one year of availing health
insurance policy. It is concluded that the source of awareness of the health insurance companies
is not influencing the difference between the number of years availing the health insurance
policy of their respondents.
4.26 RENEWAL STATUS OF HEALTH INSURANCE POLICY AND SOURCE OF
AWARENESS FOR HEALTH INSURANCE COMPANIES
H13: There is no difference between renewal status of health insurance policy with respect to
different source of awareness for health insurance companies.
130
TABLE 4.28
RENEWAL STATUS OF HEALTH INSURANCE POLICY AND SOURCE OF
Squares Square
Within Groups 1274.775 647 1.970
Total 1280.898 649
Friends and Between Groups .219 2 .110 .065 .937
Total 1093.914 649
Within Groups 994.843 647 1.538
Total 1000.962 649
Employer Between Groups 1.973 2 .987 .606 .546
Within Groups 1053.912 647 1.629
Total 1055.885 649
Total 1126.125 649
Insurance agent Between Groups 5.712 2 2.856 1.749 .175
Within Groups 1056.327 647 1.633
Total 1062.038 649
Hospital Between Groups 2.807 2 1.403 .889 .411
Within Groups 1021.039 647 1.578
Total 1023.846 649
Total 947.440 649
NGO Between Groups 1.030 2 .515 .342 .711
Within Groups 975.076 647 1.507
Total 976.106 649
Inference
Above table shows that p value is greater than 0.05 for all the sources of awareness variables.
Hence null hypothesis is accepted. It is concluded that there is no difference between renewal
status of health insurance policy with respect to advertisement, friends and family, TV,
131
employer, brochures and pamphlets, insurance agents, educational institutions, hospitals and
NGO.
The research shows that many respondents discontinued their health insurance policy. It is
concluded that the majority of the respondents have no variation according to the renewal status
of their health insurance policies with respect to the source of the awareness by the health
insurance companies. The agents have to take care of the renewal status of the respondent by the
proper follow up.
4.27 NATURE OF HEALTH INSURANCE COMPANY AND SOURCE OF
H14: There is no difference between nature of health insurance company with respect to different
TABLE 4.29
NATURE OF HEALTH INSURANCE COMPANY AND SOURCE OF AWARENESS
Squares Square
Advertisement Between 3.475 2 1.738 .880 .415
Groups
Within Groups 1277.423 647 1.974
Total 1280.898 649
Friends and Between 7.839 2 3.920 2.335 .098
relatives Groups
Within Groups 1086.074 647 1.679
Total 1093.914 649
TV Between 2.429 2 1.214 .787 .456
Groups
Within Groups 998.533 647 1.543
Total 1000.962 649
Employer Between 1.689 2 .844 .518 .596
Groups
Within Groups 1054.196 647 1.629
132
Total 1055.885 649
ANOVA Sum of Squares df Mean F Sig. ANOVA
Square
Brochures & Between .502 2 .251 .144 .866
pamphlets Groups
Within Groups 1125.622 647 1.740
Total 1126.125 649
Insurance agent Between 1.547 2 .774 .472 .624
Groups
Within Groups 1060.491 647 1.639
Total 1062.038 649
Hospital Between 17.052 2 8.526 5.479 .004**
Groups
Within Groups 1006.794 647 1.556
Total 1023.846 649
Educational Between 8.916 2 4.458 3.073 .047**
institution Groups
Within Groups 938.524 647 1.451
Total 947.440 649
NGO Between 2.737 2 1.368 .909 .403
Groups
Within Groups 973.370 647 1.504
Total 976.106 649
Inference
Since p value is less than 0.05 for educational institutions and hospital, hence null hypothesis is
rejected for educational institutions and hospital. It concludes that there is a difference between
nature of health insurance company with respect to educational institutions and hospital.
The researcher divided the nature of health insurance companies in to three categories as
government, private and stand alone. It is found that the factors such as educational institutions
and hospitals were influencing the respondents to choose the nature of health insurance
companies.
133
4.28 CUSTOMER ATTITUDE OF HEALTH INSURANCE COMPANY AND POLICY
There are 34 variables identified by the researcher with the help of previous studies related to
customer attitude of health insurance. The factor analysis tool has been employed to reduce the
variables into important factors.
TABLE 4.30
KMO AND BARTLETT'S TEST
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .938

Bartlett's Test of Approx. Chi-Square 6806.951
Sphericity Df 561
Sig. 0.000
In the present study, Kaiser-Meyer-Oklin (KMO) Measure of Sampling Adequacy (MSA) and
Bartletts test of Sphericity were applied to verify the adequacy or appropriateness of data for
factor analysis. Moreover, in this study, the value of KMO for overall matrix was found to be
excellent (0.938) and Bartletts test of Sphericity was highly significant (p<0.05). Bartletts
Sphericity test was effective, as the chi-square value draws significance at five per cent level.
The results thus indicated that the sample taken was appropriate to proceed with a factor analysis
procedure. Besides the Bartletts Test of Sphericity and the KMO Measure of sampling
Adequacy, Communality values of all variables were also observed.
134
TABLE 4.31 : CUSTOMER ATTITUDE OF HEALTH INSURANCE COMPANY AND
POLICY
Communalities Initial Extraction
Willingness to help customers and the readiness to respond to
1.00 0.649
customers request
Giving caring and individual attention to customers by having the
1.00 0.493
customers best interests at heart
Agents and employees who instill confidence in customers by proper
1.00 0.653
behavior
Agents and employees who understand the specific needs of their
1.00 0.623
customers
Apprising the customers of the nature and schedule of service
1.00 0.513
available in the organization
Proving prompt service to customers 1.00 0.547
Agents and employees who have proper knowledge and competence
1.00 0.525
to answer customers specific queries and requests
Effective customers grievance redressal procedures 1.00 0.569
Attractive and informative media and theme layout and language of
1.00 0.572
the advertisement
Visually appealing materials and facilities associated with the service 1.00 0.426
Easy to get information about insurance policies through T.V.,
1.00 0.338
newspaper, internet etc. Rather than agents
Staff appeared neat and professional 1.00 0.561
Modern looking updated equipment, fixtures and facilities 1.00 0.523
Provides proper drinking water and sanitary facilities 1.00 0.458
Branch layouts been designed to give more space to the customers to
1.00 0.551
transact business
Providing visually appealing signs, symbols, advertisement boards,
1.00 0.433
pamphlets and other artifacts in the branch offices
Comfortable physical layout of premises, furnishings and ambient
conditions (e.g. Temperature, ventilation, noise, odor) for the 1.00 0.515
customer to interact with official staff
sPromotes ethical conduct in everything it does 1.00 0.450
High rate of turn on insurance products as compared to the other
saving instruments (fixed deposits in banks, national saving certificates 1.00 0.450
etc.)
Adequate and necessary personnel/ agents for good customer service 1.00 0.480
Timely revival of lapsed policies, change of nominations, addressed
1.00 0.546
and mode of premium payment etc.
Speedy documentation and processes from the time of issue of
1.00 0.440
policies up to the settlement of claims (e.g. Premium and default
135
notice etc.)
Number of regular meetings with agents, discussion on each and every

aspect of the policy, analysis of various tax aspects etc. In order to buy 1.00 0.369
insurance policy
Performing service right the first time 1.00 0.491
Ability of agents to give truthful advice on investments/ tax benefits. 1.00 0.542
Convenient to pay premium on due date 1.00 0.562
Flexible products/ new products that meet customers needs 1.00 0.564
Marking customers feel safe and secure in their transactions 1.00 0.540
Enhancement of technological capability (e.g. Computerization,
1.00 0.489
networking of operations etc.) to serve customers more effectively
Adequate and necessary facility for good customer services 1.00 0.441
Wide use of modern and alternative mode of premium payment such
1.00 0.610
as electronic clearing system, payment through internet etc.
Appropriate behavior of the concerned staff 1.00 0.598
Convenient location of the branch offices 1.00 0.512
Availability of top official on case of need 1.00 0.429
In order to provide a more parsimonious interpretation of the results, 34-item scale was then
Factor analyzed using the Principal Component method with Varimax rotation.
Factor analysis attempts to identify underlying variables, or factors, that explain the pattern of
correlations within a set of observed variables. Factor analysis is often used in data reduction to
identify a small number of factors that explain most of the variance observed in a much larger
number of manifest variables. In the current study Rotation Factor analysis is performed to
measure the perception about occupation of the study of the respondents. The significance of
variables is depicted in the following table.
136
FIGURE 4.6
FACTOR ANALYSIS FOR CUSTOMER ATTITUDE OF HEALTH INSURANCE
COMPANY AND POLICY
137
TABLE 4.32
FACTOR ANALYSIS FOR CUSTOMER ATTITUDE OF HEALTH INSURANCE
COMPANY AND POLICY
Component
Rotated Component Matrix
1 2 3 4 5 6 7
Appropriate behavior of the
.671
concerned staff
Wide use of modern and
alternative mode of premium
payment such as electronic .649
clearing system, payment through
internet etc.
Convenient location of the branch
.602
offices
Adequate and necessary facility
.513
for good customer services
Branch layouts been designed to
give more space to the customers .631
to transact business
Comfortable physical layout of
premises, furnishings and ambient
conditions (e.g. Temperature,
.615
ventilation, noise, odor) for the
customer to interact with official
staff
Promotes ethical conduct in
.547
everything it does
Proving prompt service to
.687
customers
Attractive and informative media
and theme layout and language of .650
the advertisement
Agents and employees who have
proper knowledge and
.604
competence to answer customers
specific queries and requests
Agents and employees who instill
confidence in customers by proper .747
behavior
Willingness to help customers and
the readiness to respond to .718
customers request
138
Giving caring and individual
attention to customers by having
.578
the customers best interests at
heart
139
Component
1 2 3 4 5 6 7
Marking customers feel safe and
.667
secure in their transactions
Effective customers grievance
.639
redressal procedures
Availability of top official on case
.544
of need
Ability of agents to give truthful
advice on investments/ tax .626
benefits.
Convenient to pay premium on
.536
due date
Agents and employees who
understand the specific needs of .674
their customers
Apprising the customers of the
nature and schedule of service .565
available in the organization
Eigen value 3.047 2.941 2.648 2.550 2.242 2.212 1.823
% of Variance 8.963 8.650 7.788 7.499 6.595 6.507 5.361
Cumulative 8.963 17.6 25.4 32.90 39.5 46.02 51.36
Note: Factor loadings below 0.50 are not shown in this Table.
Seven factors were identified as being maximum percentage variance accounted. Appropriate
behavior of the concerned staff, wide use of modern and alternative mode of premium payment
such as electronic clearing system, payment through internet etc., convenient location of the
branch offices and adequate and necessary facility for good customer services are grouped as a
factor I and it accounts for 8.963% of the total variable.
Branch layouts have been designed to give more space to the customers to transact business,
comfortable physical layout of premises, furnishings and ambient conditions (e.g. Temperature,
ventilation, noise, odor) for the customer to interact with official staff and promotes ethical
conduct in everything are does are is grouped as a factor II and it accounts for 8.65% of the total
variable.
Proving prompt service to customers, attractive and informative media and theme layout and
language of the advertisement and agents and employees who have proper knowledge and
140
competence to answer customers specific queries and requests are grouped as a factor III and it
accounts for 7.788% of the total variable.
Agents and employees who instill confidence in customers by proper behavior, willingness to
help customers and the readiness to respond to customers request and giving caring and
individual attention to customers by having the customers best interests at heart are grouped as a
factor IV and it accounts for 7.499% of the total variable.
Marking customers feel safe and secure in their transactions, effective customers grievance
redressal procedures and availability of top official on case of need heart are grouped as a factor
V and it accounts for 6.595% of the total variable.
Ability of agents to give truthful advice on investments/ tax benefits and convenient to pay
premium on due date are grouped as a factor VI and it accounts for 6.507% of the total variable.
Agents and employees who understand the specific needs of their customers and apprising the
customers of the nature and schedule of service available in the organization are grouped as a
factor VII and it accounts for 5.361% of the total variable.
4.29 LOCATION OF RESPONDENTS AND ATTITUDE VARIABLES.
The result off actor analysis shows that the34 variables identified by the researcher with the help
of previous studies related to customer attitude of health insurance. Out of them seven factors
were identified as being maximum percentage variance accounted. They are staff behavior,
branch ambience, service quality, agent behavior, handling grievances, payment system and need
base of the customer towards health insurance companies. The T-test is administered to test the
H01: There is no difference between locations of the respondents with respect to various factors
extracted from attitude variables.
141
TABLE 4.33
LOCATION OF RESPONDENTS AND ATTITUDE VARIABLES
t-test for Equality of Means
Independent Samples Test
attitude 1 staff behavior 1.31 648 0.19
attitude 2 - branch ambience -1.26 648 0.21
attitude 3 - service quality 1.74 648 0.08
attitude 4 - agent behavior -0.66 648 0.51
attitude 5 - handling grievances 0.64 648 0.52
attitude 6 - payment system -0.81 648 0.42
attitude 7 - need based -1.56 648 0.12
Inference
Since p value is greater than 0.05 for all the factors extracted from attitude, hence null hypothesis
is accepted.
It concludes that there is no difference between locations of the respondents with respect to
various factors extracted from attitude variables. Both the urban and rural respondents are
following their agent behavior to improvise their quality of service and also the payment system.
4.30 LOCATION OF RESPONDENTS AND ATTITUDE VARIABLES
The result of factor analysis shows that the34 variables identified by the researcher with the help
H02: There is no difference between age of the respondents with respect to various factors
142
TABLE 4.34

Squares Square
attitude 1 Between Groups 4.800 3 1.600 1.605 .187
staff Within Groups 644.200 646 .997
behavior Total 649.000 649
attitude 2 - Between Groups 6.320 3 2.107 2.118 .097
branch Within Groups 642.680 646 .995
ambience Total 649.000 649
attitude 3 - Between Groups 20.932 3 6.977 7.176 .000**
service Within Groups 628.068 646 .972
quality Total 649.000 649
agent Within Groups 638.760 646 .989
handling Within Groups 641.614 646 .993
grievances Total 649.000 649
payment Within Groups 636.782 646 .986
system Total 649.000 649
need based Within Groups 643.123 646 .996
Total 649.000 649
Inference
Since p value is less than 0.05 for third and sixth factor extracted. Hence null hypothesis is
rejected for third and sixth factor extracted.
It concludes that there is a difference between ages of the respondents with respect to proving
prompt service to customers, attractive and informative media and theme layout, language of the
advertisement and agents and employees who have proper knowledge and competence to answer
customers specific queries and requests, ability of agents to give truthful advice on investments/
tax benefits and convenient to pay premium on due date.
143
H03: There is no difference between qualifications of the respondents with respect to various
factors extracted from attitude variables.
TABLE 4.35
Sum of Mean
ANOVA df F Sig.
Squares Square
attitude 1 Between Groups 2.776 3 .925 .925 .428
staff Within Groups 646.224 646 1.000
branch Within Groups 645.690 646 1.000
attitude 3 - Between Groups 1.069 3 .356 .355 .785
service Within Groups 647.931 646 1.003
agent Within Groups 646.162 646 1.000
handling Within Groups 646.922 646 1.001
Between Groups 2.134 3 .711 .710 .546
attitude 7 -
Within Groups 646.866 646 1.001
need based
Total 649.000 649
Inference
144
is accepted.
It concludes that there is no difference between educational qualifications of the respondents
with respect to various factors extracted from attitude variables. The agents are the major factor
who giving the customers need based policies with a quality of service. They also help them to
handle the various grievances and assist them during the claim of health insurance policies.
H04: There is no difference between qualifications of the respondents with respect to various
TABLE 4.36

attitude 1 staff behavior -2.781 648 0.006**
attitude 2 - branch ambience .789 648 0.431
attitude 4 - agent behavior 2.070 648 0.039**
attitude 5 - handling grievances 2.281 648 0.023**
attitude 6 - payment system 2.623 648 0.009**
145
Inference
Since p value is less than 0.05 for first, fourth, fifth and sixth factor extracted. Hence null
hypothesis is rejected for first, fourth, fifth and sixth factor extracted. It is concluded that there is
a variation in staff behavior according to the gender of the respondent has its impact in first,
fourth, fifth and sixth factor of attitude according to the health insurance companies.
It concludes that there is a difference between gender of the respondents with respect to
appropriate behavior of the concerned staff, wide use of modern and alternative mode of
premium payment such as electronic clearing system, payment through internet etc., convenient
location of the branch offices and adequate and necessary facility for good customer services,
individual attention to customers by having the customers best interests at heart, Marking
customers feel safe and secure in their transactions, effective customers grievance redressal
procedures and availability of top official on case of need heart, Ability of agents to give truthful
advice on investments/ tax benefits and convenient to pay premium on due date.
4.33 OCCUPATION OF RESPONDENTS AND ATTITUDE VARIABLES
base of the customer towards health insurance companies. The ANOVA is administered to test
H05: There is no difference between occupations of the respondents with respect to various
146
TABLE 4.37
OCCUPATION OF RESPONDENTS AND ATTITUDE VARIABLES

Squares Square
Total 649.000 649
Inference
Since p value is less than 0.05 for seventh factor extracted, hence null hypothesis rejected for
seventh factor.
It is found that there is a difference between occupations with respect to Agents and employees
who understand the specific needs of their customers and apprising the customers of the nature
and schedule of service available in the organization.
4.34 NUMBER OF DEPENDENTS AND ATTITUDE VARIABLES
147
H06: There is no difference between numbers of dependents of the respondents with respect to
various factors extracted from attitude variables.
TABLE 4.38
NUMBER OF DEPENDENTS AND ATTITUDE VARIABLES
Squares Square
attitude 2 - Between Groups .686 3 .229 .228 .877
payment Within Groups 646.736 646 1.001
need based Within Groups 647.128 646 1.002
Total 649.000 649
Inference
148
Since p value is less than 0.05 for third factor extracted, hence null hypothesis rejected for third
factor extracted.
It is concluded that there is difference between numbers of dependents of the respondents with
respect to proving prompt service to customers, attractive and informative media and theme
layout and language of the advertisement and agents and employees who have proper knowledge
and competence to answer customers specific queries and requests.
4.35 MARITAL STATUS OF THE RESPONDENTS AND ATTITUDE VARIABLES
H07: There is no difference between marital statuses of the respondents with respect to various
TABLE 4.39
MARITAL STATUS OF THE RESPONDENTS AND ATTITUDE VARIABLES
attitude 1 staff behavior -1.36 648 0.176
attitude 4 - agent behavior 3.39 648 0.001**
attitude 5 - handling grievances 0.74 648 0.459
attitude 6 - payment system -1.09 648 0.276
149
Inference
Since p value is less than 0.05 for fourth factor extracted, hence null hypothesis rejected for third
factor extracted.
It concludes that there is difference between marital status of the respondents with respect to
individual attention to customers by having the customers best interests at heart.
4.36 FAMILY TYPE OF RESPONDENTS AND ATTITUDE VARIABLES
H08: There is no difference between family type of the respondents with respect to various
TABLE 4.40
FAMILY TYPE OF RESPONDENTS AND ATTITUDE VARIABLES

attitude 1 staff behavior 1.50 648 0.134
attitude 3 - service quality -2.56 648 0.011**
attitude 4 - agent behavior -1.21 648 0.226
attitude 5 - handling grievances -1.19 648 0.236
attitude 6 - payment system 1.10 648 0.270
attitude 7 - need based 2.39 648 0.017**
150
Inference
Since p value is less than 0.05 for third and seventh attitude factor extracted, hence null
hypothesis rejected for third and seventh attitude factor extracted.
It concludes that there is difference between number of dependents of the respondents with
respect to proving prompt service to customers, attractive and informative media and theme
and competence to answer customers specific queries and requests, agents and employees who
understand the specific needs of their customers and apprising the customers of the nature and
schedule of service available in the organization.
4.36 MONTHLY INCOME OF RESPONDENTS AND ATTITUDE VARIABLES
H09: There is no difference between monthly income of the respondents with respect to various
151
TABLE 4.41
MONTHLY INCOME OF RESPONDENTS AND ATTITUDE VARIABLES

Squares Square
staff Within Groups 645.108 646 .999
Total 649.000 649
Inference
is accepted.
It concludes that there is no difference between monthly income of the respondents with respect
to various factors extracted from attitude variables. As most of the respondents were government
employees and also the nature of policies varies according to the monthly income of the
respondents it dont have much more impacts. The agents were assisting them in choosing the
perfect type of health insurance policy according to their monthly income.
4.37 TYPE OF INSURANCE POLICY AND ATTITUDE VARIABLES
152
H10: There is no difference between type of insurance policy with respect to various factors
TABLE 4.42
TYPE OF INSURANCE POLICY AND ATTITUDE VARIABLES
Squares Square
Total 649.000 649
Inference
153
Since p value is less than 0.05 for fourth attitude factor, hence null hypothesis rejected for fourth
attitude factor.
It concludes that there is a difference between insurance types with respect to agents and
employees who instill confidence in customers by proper behavior, willingness to help customers
and the readiness to respond to customers request and giving caring and individual attention to
customers by having the customers best interests at heart.
4.38 SUM INSURED AND ATTITUDE VARIABLES
to various factors extracted from attitude variables.
154
TABLE 4.43
SUM INSURED AND ATTITUDE VARIABLES
Squares Square
Total 649.000 649
Inference
Since p value is less than 0.05 for fourth attitude factor, hence null hypothesis rejected for fourth
attitude factor.
It concludes that there is a difference between sum insured under the health insurance policy
with respect to agents and employees who instill confidence in customers by proper behavior,
willingness to help customers and the readiness to respond to customers request and giving
caring and individual attention to customers by having the customers best interests at heart.
4.39 NUMBER OF YEARS AVAILING HEALTH INSURANCE POLICY AND

ATTITUDE VARIABLES
155
H12: There is no difference between number of years availing health insurance policy with
respect to various factors extracted from attitude variables.
TABLE 4.44 NUMBER OF YEARS AVAILING HEALTH INSURANCE POLICY AND
ATTITUDE VARIABLES
Squares Square
need based Within Groups 648.740 646 1.004
Total 649.000 649
Inference
Since p value is less than 0.05 for third attitude factors, hence null hypothesis rejected for third
attitude extracted factors.
156
It concludes that there is a difference between number of years availing health insurance policy
with respect to proving prompt service to customers, attractive and informative media and theme
and competence to answer customers specific queries and requests.
4.40 RENEWAL STATUS AND ATTITUDE VARIABLES
H13: There is no difference between renewal status health insurance policy with respect to
various factors extracted from attitude variables.
157
TABLE 4.45
RENEWAL STATUS AND ATTITUDE VARIABLES

Squares Square
attitude 1 Between Groups .130 2 .065 .065 .937
Total 649.000 649
Inference
Since p value is greater than 0.05 for all the factors extracted from attitude, hence null
hypothesis is accepted.
It concludes that there is no difference between renewal status of health insurance policy with
respect to various factors extracted from attitude variables. The respondents were initiated by the
agents to take a health insurance policy but after that they dont have a proper follow up
procedure towards the health insurance companies. The branch ambience plays the major role as
the agents from various location chosen the respondents that they are not aware of the renewal
status and the procedure given by the health insurance companies.
4.41 NATURE OF HEALTH INSURANCE COMPANY AND ATTITUDE VARIABLES
158
H14: There is no difference between nature of health insurance company with respect to various
TABLE 4.46
NATURE OF HEALTH INSURANCE COMPANY AND ATTITUDE VARIABLES
Squares Square
attitude 1 Between Groups .764 2 .382 .381 .683
handling Within Groups 644.322 647 .996
Total 649.000 649
159
Inference
is accepted.
It concludes that there is no difference between nature of health insurance company with respect
to various factors extracted from attitude variables. The quality of service and the behavior of
staffs and the agents attract the respondents towards the health insurance companies. The
advertisement of the companies become too smart in various ways to influence the customers
towards them.
160
CHAPTER V
ANALYSIS OF CONSUMERS PURCHASE INTENTION,
EXPECTATIONS AND SATISFACTION TOWARDS HEALTH
INSURANCE
5.1 INTRODUCTION
A questionnaire was developed in a way to find out the important factors which influence the
customers in selecting a particular company. The variables which were included consisted of
purchase intention, expectations and satisfaction, helped to build a model through which
consumers behavior towards health insurance. This chapter discussed deficiencies of number of
dependents, monthly income, insurance type, sum insured, number of years availing health
insurance, renewal status and nature of health insurance companies factors are extracted.
5.2 FACTOR ANALYSIS FOR DEFICIENCIES OF HEALTH INSURANCE COMPANY
AND POLICY
There are 22 variables identified by the researcher with the help of previous studies related to
customer deficiencies of health insurance companies. The factor analysis tool has employed to
reduce the variables into 4 important factors.
TABLE 5.1
FACTOR ANALYSIS - KMO AND BARTLETT'S TEST FOR SAMPLING ADEQUACY
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .909

Bartlett's Test of Sphericity Approx. Chi-Square 3986.743
Df 231
Sig. .000
In the present study, Kaiser-Meyer-Oklin (KMO) Measure of Sampling Adequacy (MSA) and
Bartletts test of Sphericity were applied to verify the adequacy or appropriateness of data for
factor analysis. In this study, the value of KMO for overall matrix was found to be excellent
(0.909) and Bartletts test of Sphericity was highly significant (p<0.05). Bartletts Sphericity test
was effective, as the chi-square value draws significance at five per cent level. The results thus
indicated that the sample taken was appropriate to proceed with a factor analysis procedure.
161
Besides the Bartletts Test of Sphericity and the KMO Measure of sampling Adequacy,
Communality values of all variables were also observed.
TABLE 5.2
COMMUNALITY VALUES OF ALL VARIABLES OF DEFICIENCIES OF HEALTH

INSURANCE COMPANY

Product knowledge 1.000 .406
Rigid procedure 1.000 .637
Delay in operations 1.000 .433
Lack of financial assistance in time 1.000 .518
Commitment to hospital 1.000 .525
Documentation 1.000 .525
Unnecessary queries 1.000 .432
Under coverage 1.000 .346
Delayed payments 1.000 .429
Un remunerative price 1.000 .414
Poor treatment of officials 1.000 .468
Non cooperative officials 1.000 .457
Officials with no faith in customs 1.000 .407
Miss selling by the agents 1.000 .476
More exclusion 1.000 .480
Capping/ limits in benefits 1.000 .513
Complex terms 1.000 .459
Lack of publicity 1.000 .463
Improper response 1.000 .383
High commission charges 1.000 .675
Poor accessibility 1.000 .675
162
Poor in personal attention 1.000 .397
In order to provide a more parsimonious interpretation of the results, 22-item scale was then
Factor analyzed using the Principal Component method with Varimax rotation.
Factor analysis attempts to identify underlying variables, or factors, that explain the pattern of
correlations within a set of observed variables. Factor analysis is often used in data reduction to
identify a small number of factors that explain most of the variance observed in a much larger
number of manifest variables. In the current study Rotation Factor analysis is performed to
measure the perception about occupation of the study of the respondents. The significance of
variables is depicted in the following table.
FIGURE 5.1
FACTOR ANALYSIS FOR DEFICIENCIES OF HEALTH INSURANCE COMPANY
AND POLICY
163
TABLE 5.3
FACTOR ANALYSIS FOR DEFICIENCIES OF HEALTH INSURANCE COMPANY

AND POLICY
Component
1 2 3 4
Capping/ limits in benefits .645
Officials with no faith in customs .624
Complex terms .618
Lack of publicity .618
Poor treatment of officials .612
More exclusion .598
Miss selling by the agents .591
Non cooperative officials .569
Un remunerative price .565
Improper response .561
Lack of financial assistance in time .695
Commitment to hospital .662
Delay in operations .620
Product knowledge .600
Documentation .594
Delayed payments .577
Unnecessary queries .546
Poor accessibility .810
High commission charges .810
Rigid procedure .738
Eigen value 4.208 3.488 1.616 1.207
% of Variance 19.128 15.856 7.344 5.485
164
Cumulative 19.128 34.984 42.328 47.812
Inference
Three factors were identified as being maximum percentage variance accounted. Capping/ limits
in benefits, Officials with no faith in customs, Complex terms, Lack of publicity, Poor treatment
of officials, More exclusion, Miss selling by the agents, Non cooperative officials, Un
remunerative price and Improper response is grouped as a factor I and it accounts for 19.128% of
the total variance. Lack of financial assistance in time, Commitment to hospital, Delay in
operations, Product knowledge, Documentation, Delayed payments and unnecessary queries is
grouped as a factor II and it accounts for 15.856% of the total variance. Poor accessibility and
High commission charges are grouped as a factor III and it accounts for 7.334% of the total
variable. Rigid procedure is the IV factor and it accounts for 5.485 of the total variance.
5.3 LOCATION OF RESPONDENT AND DEFICIENCIES FACTORS
The researcher analyzed with the help of previous studies related to customer deficiencies of
health insurance companies. The factor analysis tool has employed to reduce the variables into 4
important factors as follows. They are officials/agents, services offered by the health insurance
companies, commission or charges and rigid procedure. The t test is employed to test the
H01: There is no difference between locations of the respondents with respect to different
deficiencies factors extracted.
TABLE 5.4
DIFFERENCE BETWEEN DEMOGRAPHICS AND DIFFERENT DEFICIENCIES
FACTORS EXTRACTED
T df Sig. (2-tailed)
Deficiencies 1 officials/agents -.627 648 .531
Deficiencies 2 services .982 648 .327
Deficiencies 3 commissions/charges -.177 648 .860
Deficiencies 4 rigid procedure -.334 648 .739
Inference
165
Since p value is greater than 0.05 for all the deficiencies extracted factors, hence null hypothesis
is accepted.
It concludes that there is no difference between locations of the respondents with respect to
different deficiencies factors extracted.
5.4 AGE OF RESPONDENT AND DEFICIENCIES FACTORS
important factors as follows. They are officials/agents, services offered by the health insurance
H02: There is no difference between age of the respondents with respect to different deficiencies
factors extracted.
TABLE 5.5
DIFFERENCE BETWEEN AGE OF THE RESPONDENTS WITH RESPECT TO
DIFFERENT DEFICIENCIES FACTORS EXTRACTED
Squares Square
Deficiencies 1 Between 22.418 3 7.473 7.704 .000**
officials/agents Groups
Within Groups 626.582 646 .970
Total 649.000 649
Deficiencies 2 services Between 1.055 3 .352 .351 .789
Groups
Within Groups 647.945 646 1.003
Total 649.000 649
commissions/charges Groups
Total 649.000 649
166
Deficiencies 4 rigid Between 21.386 3 7.129 7.338 .000**
procedure Groups
Total 649.000 649
Inference
Since p value is less than 0.05 for first, third and fourth deficiencies extracted factors. Hence null
hypothesis is rejected for first, third and fourth deficiencies extracted factors.
It concludes that there is a difference between age of the respondents and capping / limits in
benefits, officials with no faith in customs, complex terms, lack of publicity, poor treatment of
officials, more exclusion, miss selling by the agents, non-cooperative officials, un remunerative
price, improper response, lack of financial assistance in time, commitment to hospital, delay in
operations, product knowledge, documentation, delayed payments, unnecessary queries and rigid
procedures.
5.5 GENDER OF RESPONDENT AND DEFICIENCIES FACTORS
important factors as follows. They are; officials/agents, services offered by the health insurance
H03: There is no difference between gender of the respondents with respect to different
TABLE 5.6
167
DIFFERENCE BETWEEN GENDER OF THE RESPONDENTS WITH RESPECT TO
Deficiencies 1 officials/agents 1.444 648 .149
Deficiencies 2 services 1.060 648 .290
Deficiencies 3 commissions/charges -1.835 648 .067
Deficiencies 4 rigid procedure 1.087 648 .278
Inference
is accepted.
It concludes that there is no difference between gender of the respondents with respect to
5.6 EDUCATIONAL QUALIFICATION OF RESPONDENT AND DEFICIENCIES
FACTORS
important factors as follows. They are; officials/agents, services offered by the health insurance
companies, commission or charges and rigid procedure. The t test in employed to test the
H04: There is no difference between qualifications of the respondents with respect to different
TABLE 5.7
DIFFERENCE BETWEEN QUALIFICATIONS OF THE RESPONDENTS WITH
RESPECT TO DIFFERENT DEFICIENCIES FACTORS EXTRACTED

Squares Square
Deficiencies 1 Between Groups 7.501 3 2.500 2.518 .057
168
officials/agents Within Groups 641.499 646 .993
Total 649.000 649
Deficiencies 2 services Between Groups 1.111 3 .370 .369 .775
Within Groups 647.889 646 1.003
Total 649.000 649
commissions/charges Within Groups 643.454 646 .996
Total 649.000 649
Deficiencies 4 rigid Between Groups .371 3 .124 .123 .946
procedure Within Groups 648.629 646 1.004
Total 649.000 649
Inference
is accepted.
It concludes that there is no difference between qualifications of the respondents with respect to
5.7 LOCATION OF RESPONDENTS AND DEFICIENCIES FACTORS
important factors as follows. They are: officials/agents, services offered by the health insurance
H05: There is no difference between occupations of the respondents with respect to different
TABLE 5.8
DIFFERENCE BETWEEN OCCUPATIONS OF THE RESPONDENTS WITH
169
Squares Square
Within 637.327 644 .990
Groups
Total 649.000 649
Deficiencies 2 services Between 7.228 5 1.446 1.451 .204
Groups
Within 641.772 644 .997
Groups
Total 649.000 649
Within 622.805 644 .967
Groups
Total 649.000 649
Deficiencies 4 rigid Between 4.658 5 .932 .931 .460
procedure Groups
Within 644.342 644 1.001
Groups
Total 649.000 649
Inference
Since p value is less than 0.05 for first and third deficiencies extracted factors, hence null
hypothesis is reject for first and third deficiencies extracted factors.
It concludes that there is a difference between occupations of the respondents with respect to
capping/ limits in benefits, officials with no faith in customs, complex terms, lack of publicity,
poor treatment of officials, more exclusion, miss selling by the agents, non-cooperative officials,
un remunerative price, improper response, poor accessibility and high commission charges.
5.8 DEPENDENTS OF RESPONDENT AND DEFICIENCIES FACTORS
170
H06: There is no difference between numbers of dependent of the respondents with respect to
TABLE 5.9
DIFFERENCE BETWEEN NUMBERS OF DEPENDENT OF THE RESPONDENTS WITH
Squares Square
officials/agents
Within Groups 645.856 646 1.000
Total 649.000 649
Deficiencies 2 services Between Groups 5.971 3 1.990 2.000 .113

Total 649.000 649
Deficiencies 3 Between Groups 2.971 3 .990 .990 .397
commissions/charges
Within Groups 646.029 646 1.000
Total 649.000 649
Deficiencies 4 rigid Between Groups 7.630 3 2.543 2.562 .054
procedure
Total 649.000 649
Inference
is accepted.
It concludes that there is no difference between numbers of dependents of the respondents with
respect to different deficiencies factors extracted.
5.9 MARITAL STATUS OF RESPONDENT AND DEFICIENCIES FACTORS
171
H07: There is no difference between marital statuses of the respondents with respect to different
Table 5.10
DIFFERENCE BETWEEN MARITAL STATUSES OF THE RESPONDENTS WITH
Deficiencies 1 officials/agents .988 648 .324
Deficiencies 2 services -1.267 648 .205
Deficiencies 3 commissions/charges -1.257 648 .209
Deficiencies 4 rigid procedure 1.019 648 .309
Inference
is accepted.
It concludes that there is no difference between marital statuses of the respondents with respect
to different deficiencies factors extracted.
5.10 FAMILY TYPE OF RESPONDENT AND DEFICIENCIES FACTORS
H08: There is no difference between family types of the respondents with respect to different
TABLE 5.11
DIFFERENCE BETWEEN FAMILY TYPES OF THE RESPONDENTS WITH
172
Deficiencies 1 officials/agents -.396 648 .692
Deficiencies 2 services -.007 648 .995
Deficiencies 3 commissions/charges 3.156 648 .002**
Deficiencies 4 rigid procedure 2.994 648 .003**
Inference
Since p value is less than for third and fourth deficiencies extracted factors, hence null
hypothesis is rejected.
It concludes that there is a difference between family type of the respondents with respect to poor
accessibility, high commission charges and rigid procedures.
5.11 MONTHLY INCOME OF RESPONDENT AND DEFICIENCIES FACTORS
H09: There is no difference between monthly income of the respondents with respect to different
173
TABLE 5.12
DIFFERENCE BETWEEN MONTHLY INCOME OF THE RESPONDENTS WITH
Squares Square
Deficiencies 1 Between Groups 1.851 3 .617 .616 .605
officials/agents Within Groups 647.149 646 1.002
Total 649.000 649
Deficiencies 2 services Between Groups 3.716 3 1.239 1.240 .294
Total 649.000 649
Deficiencies 3 Between Groups .632 3 .211 .210 .890
commissions/charges Within Groups 648.368 646 1.004
Total 649.000 649
Deficiencies 4 rigid Between Groups 1.714 3 .571 .570 .635
procedure Within Groups 647.286 646 1.002
Total 649.000 649
Inference
is accepted.
5.12 TYPE OF INSURANCE POLICY AND DEFICIENCIES FACTORS
H10: There is no difference between type of insurance policy with respect to different
TABLE 5.13
174
DIFFERENCE BETWEEN TYPE OF INSURANCE POLICY WITH RESPECT TO
Sum of df Mean F Sig.
Squares Square
Deficiencies 1 Between 1.660 2 .830 .829 .437
Within Groups 647.340 647 1.001
Total 649.000 649
Groups
Within Groups 647.554 647 1.001
Total 649.000 649
Deficiencies 3 Between 2.107 2 1.053 1.054 .349
Within Groups 646.893 647 1.000
Total 649.000 649
Deficiencies 4 rigid Between .098 2 .049 .049 .952
procedure Groups
Within Groups 648.902 647 1.003
Total 649.000 649
Inference
is accepted.
It concludes that there is no difference between type of insurance with respect to different
5.13 SUM INSURED AND DEFICIENCIES FACTORS
175
TABLE 5.14
DIFFERENCE BETWEEN SUM INSURED UNDER THE HEALTH INSURANCE
POLICY WITH RESPECT TO DIFFERENT DEFICIENCIES FACTORS EXTRACTED
Squares Square
Within Groups 647.070 646 1.002
Total 649.000 649
Groups
Within Groups 647.396 646 1.002
Total 649.000 649
Within Groups 646.892 646 1.001
Total 649.000 649
Deficiencies 4 rigid Between 3.088 3 1.029 1.029 .379
procedure Groups
Within Groups 645.912 646 1.000
Total 649.000 649
Inference
is accepted.
It concludes that there is no difference between sum insured under the health insurance policy
with respect to different deficiencies factors extracted.
5.14 NUMBER OF YEARS AVAILING AND DEFICIENCIES FACTORS
176
H12: There is no difference between number of years availing health insurance policy with
TABLE 5.15
DIFFERENCE BETWEEN RENEWAL STATUS OF HEALTH INSURANCE POLICY
WITH RESPECT TO DIFFERENT DEFICIENCIES FACTORS EXTRACTED
Squares Square
Deficiencies 1 Between 3.065 3 1.022 1.022 .382
Within 645.935 646 1.000
Groups
Total 649.000 649
Groups
Within 642.363 646 .994
Groups
Total 649.000 649
Within 640.350 646 .991
Groups
Total 649.000 649
procedure Groups
Within 642.800 646 .995
Groups
Total 649.000 649
Inference
177
Since p value is less than 0.05 for third deficiencies extracted factor, hence null hypothesis is
reject for third deficiencies extracted factor.
It concludes that there is a difference between number of years availing health insurance policy
with respect to Poor accessibility and High commission charges
5.15 RENEWAL STATUS AND DEFICIENCIES FACTORS
TABLE 5.16
WITH RESPECT TO DIFFERENT DEFICIENCIES FACTORS EXTRACTED
Squares Square
Within Groups 647.958 647 1.001
Total 649.000 649
Groups
Within Groups 647.745 647 1.001
Total 649.000 649
Within Groups 647.569 647 1.001
Total 649.000 649
procedure Groups
Total 649.000 649
Inference
178
is accepted.
It concludes that there is no difference between renewal status of health insurance policy with
5.16 NATURE OF HEALTH INSURANCE COMPANY AND DEFICIENCIES FACTORS
H13: There is no difference between nature of health insurance company with respect to different
TABLE 5.17
DIFFERENCE BETWEEN NATURE OF HEALTH INSURANCE COMPANY WITH
Squares Square
Within 642.349 647 .993
Groups
Total 649.000 649
Groups
Within 645.568 647 .998
Groups
Total 649.000 649
Deficiencies 3 Between .876 2 .438 .437 .646
Within 648.124 647 1.002
Groups
Total 649.000 649
procedure Groups
Within 646.839 647 1.000
Groups
179
Total 649.000 649
Inference
Since p value is less than 0.05 for first deficiencies extracted factors, hence null hypothesis is
rejected for first deficiencies extracted factors.
It concludes that there is a difference between nature of health insurance company with respect
to capping/ limits in benefits, officials with no faith in customs, complex terms, lack of publicity,
poor treatment of officials, more exclusion, miss selling by the agents, non cooperative officials,
un remunerative price and improper response.
5.17 DIFFERENCE BETWEEN DEMOGRAPHICS WITH RESPECT TO OVERALL
SWITCHOVER, CUSTOMER SATISFACTION, PERCEPTION, EXPECTATION AND
PURCHASE INTENTION
H01: There is no difference between location of the respondents with respect to overall
switchover, customer satisfaction, perception, expectation and purchase intention.
TABLE 5.18
DIFFERENCE BETWEEN DEMOGRAPHICS WITH RESPECT TO OVERALL
PURCHASE INTENTION

Purchase intention 2.229 648 .026**
Switch Over 3.180 648 .002**
Customer Satisfaction 2.579 648 .010**
Expectations .076 648 .939
Perception -1.014 648 .311
180
Inference
Since p value is less than 0.05 for purchase intention, switchover and customer satisfaction,
hence null hypothesis is rejected for purchase intention, switchover and customer satisfaction.
It concludes that there is a difference between location of the respondents with respect to
purchase intention, switchover and customer satisfaction.
H02: There is no difference between age of the respondents with respect to overall switchover,
customer satisfaction, perception, expectation and purchase intention.
TABLE .5.19
DIFFERENCE BETWEEN AGE OF THE RESPONDENTS WITH RESPECT TO
OVERALL SWITCHOVER, CUSTOMER SATISFACTION, PERCEPTION,
EXPECTATION AND PURCHASE INTENTION
Squares Square
Purchase Between 1224.057 3 408.019 3.592 .013**
intention Groups
Within Groups 73375.557 646 113.584
Total 74599.614 649
Switch Over Between 1434.155 3 478.052 5.846 .001**
Groups
Within Groups 52823.470 646 81.770
Total 54257.625 649
Customer Between 469.252 3 156.417 3.403 .017**
Satisfaction Groups
Within Groups 29689.241 646 45.959
Total 30158.494 649
Expectations Between 9235.120 3 3078.373 8.992 .000**
Groups
Within Groups 221151.005 646 342.339
Total 230386.125 649
Perception Between 7606.844 3 2535.615 8.118 .000**
Groups
Within Groups 201774.670 646 312.345
Total 209381.514 649
Inference
181
Since p value is less than 0.05 for switchover, customer satisfaction, perception, expectation and
purchase intention, hence null hypothesis rejected.
It concludes that there is a difference between age of the respondents with respect to overall
TABLE 5.20
H03: There is no difference between gender of the respondents with respect to overall
DIFFERENCE BETWEEN GENDER OF THE RESPONDENTS WITH RESPECT TO


Squares Square
Purchase Between Groups 41.067 1 41.067 .357 .550
intention Within Groups 74558.547 648 115.059
Total 74599.614 649
Switch Over Between Groups 309.906 1 309.906 3.722 .054
Within Groups 53947.718 648 83.253
Total 54257.625 649
Customer Between Groups 112.044 1 112.044 2.416 .121
Satisfaction Within Groups 30046.450 648 46.368
Total 30158.494 649
Expectations Between Groups 831.881 1 831.881 2.348 .126
Within Groups 229554.244 648 354.250
Total 230386.125 649
182
Perception Between Groups 1109.158 1 1109.158 3.451 .064
Within Groups 208272.356 648 321.408
Total 209381.514 649
Inference
Since p value is greater than 0.05 for switchover, customer satisfaction, perception, expectation
and purchase intention, hence null hypothesis accepted.
It is concluded that there is no difference between gender of the respondents with respect to
overall switchover, customer satisfaction, perception, expectation and purchase intention.
TABLE 5.21
H04: There is no difference between qualification of the respondents with respect to overall
DIFFERENCE BETWEEN QUALIFICATION OF THE RESPONDENTS WITH
RESPECT TO OVERALL SWITCHOVER, CUSTOMER SATISFACTION,
PERCEPTION, EXPECTATION AND PURCHASE INTENTION
Squares Square
Total 74599.614 649
Switch Over Between Groups 195.904 3 65.301 .780 .505
Within Groups 54061.720 646 83.687
Total 54257.625 649
Total 30158.494 649
Within Groups 228519.122 646 353.745
Total 230386.125 649
Within Groups 207726.144 646 321.557
Total 209381.514 649
183
Inference
It concludes that there is no difference between qualifications of the respondents with respect to
TABLE 5.22
H05: There is no difference between occupation of the respondents with respect to overall
DIFFERENCE BETWEEN OCCUPATION OF THE RESPONDENTS WITH RESPECT

TO OVERALL SWITCHOVER, CUSTOMER SATISFACTION, PERCEPTION,

Squares Square
Purchase Between 337.167 5 67.433 .585 .712
intention Groups
Within Groups 74262.447 644 115.314
Total 74599.614 649
Groups
Within Groups 53066.579 644 82.402
Total 54257.625 649
Customer Between 507.885 5 101.577 2.206 .052
Satisfaction Groups
Within Groups 29650.609 644 46.041
Total 30158.494 649
Expectations Between 1998.161 5 399.632 1.127 .345
Groups
Within Groups 228387.964 644 354.640
Total 230386.125 649
Perception Between 1841.821 5 368.364 1.143 .336
Groups
Within Groups 207539.693 644 322.267
Total 209381.514 649
184
Inference
Since p value is less than 0.05 switchover, hence null hypothesis is rejected for switch over.
It concludes that there is a difference between occupation of the respondents with respect to
switch over.
TABLE 5.23
H06: There is no difference between marital status of the respondents with respect to overall
DIFFERENCE BETWEEN MARITAL STATUS OF THE RESPONDENTS WITH


Purchase intention -.958 648 .338
Switch Over .693 648 .488
Customer Satisfaction -.447 648 .655
Expectations -.284 648 .777
Perception .972 648 .332
Inference
It concludes that there is no difference between marital status of the respondents with respect to
185
TABLE 5.24
H07: There is no difference between family type of the respondents with respect to overall
DIFFERENCE BETWEEN FAMILY TYPE OF THE RESPONDENTS WITH RESPECT

TO OVERALL SWITCHOVER, CUSTOMER SATISFACTION, PERCEPTION,

Purchase intention 2.229 648 .026**
Switch Over 3.180 648 .002**
Customer Satisfaction 2.579 648 .010**
Expectations .076 648 .939
Perception -1.014 648 .311
Inference
Since p value is less than 0.05 for purchase intention, switch over and customer satisfaction,
hence null hypothesis is rejected for purchase intention, switch over and customer satisfaction.
It concludes that there is a difference between family type with respect to purchase intention,
switch over and customer satisfaction.
TABLE 5.25
H08: There is no difference between monthly income of the respondents with respect to overall
186
DIFFERENCE BETWEEN MONTHLY INCOME OF THE RESPONDENTS WITH

Squares Square
Total 74599.614 649
Within Groups 54005.032 646 83.599
Total 54257.625 649
Customer Between Groups 3.696 3 1.232 .026 .994
Total 30158.494 649
Expectations Between Groups 521.184 3 173.728 .488 .691
Within Groups 229864.941 646 355.828
Total 230386.125 649
Perception Between Groups 582.180 3 194.060 .600 .615
Within Groups 208799.334 646 323.219
Total 209381.514 649
Inference
to overall switchover, customer satisfaction, perception, expectation and purchase intention.
187
TABLE 5.26
H09: There is no difference between number of dependents in the family with respect to overall
DIFFERENCE BETWEEN NUMBER OF DEPENDENTS IN THE FAMILY WITH


Squares Square
Total 74599.614 649
Within Groups 54151.351 646 83.826
Total 54257.625 649
Total 30158.494 649
Expectations Between Groups 842.152 3 280.717 .790 .500
Within Groups 229543.973 646 355.331
Total 230386.125 649
Within Groups 208055.940 646 322.068
Total 209381.514 649
Inference
It concludes that there is no difference between number of dependents in the family with respect
188
TABLE 5.27
H10: There is no difference between type of insurance policy with respect to overall switchover,
customer satisfaction, perception, expectation and purchase intention.
DIFFERENCE BETWEEN TYPE OF INSURANCE POLICY WITH RESPECT TO


Squares Square
Purchase Between Groups 280.804 2 140.402 1.222 .295
Total 74599.614 649
Switch Over Between Groups 1089.881 2 544.941 6.631 .001**
Within Groups 53167.743 647 82.176
Total 54257.625 649
Total 30158.494 649
Within Groups 229474.311 647 354.674
Total 230386.125 649
Within Groups 208318.641 647 321.976
Total 209381.514 649
Inference
Since p value is less than 0.05 for switch over, hence null hypothesis is rejected for switch over.
It concludes that there is a difference between insurance policy type with respect to switch over.
TABLE 5.28
DIFFERENCE BETWEEN SUM INSURED UNDER THE HEALTH INSURANCE

POLICY WITH RESPECT TO OVERALL SWITCHOVER, CUSTOMER
SATISFACTION, PERCEPTION, EXPECTATION AND PURCHASE INTENTION
189
Squares Square
Total 74599.614 649
Switch Over Between Groups 1200.516 3 400.172 4.872 .002**
Within Groups 53057.109 646 82.132
Total 54257.625 649
Total 30158.494 649
Within Groups 229053.424 646 354.572
Total 230386.125 649
Within Groups 208025.046 646 322.020
Total 209381.514 649
Inference
Since p value is less than 0.05 for switch over, hence null hypothesis is rejected for switch over.
It concludes that there is a difference between sum insured under the health insurance policy
with respect to switch over.
TABLE 5.29
H12: There is no difference between number of years availing the health insurance policy with
respect to overall switchover, customer satisfaction, perception, expectation and purchase
intention.
DIFFERENCE BETWEEN NUMBER OF YEARS AVAILING THE HEALTH

INSURANCE POLICY WITH RESPECT TO OVERALL SWITCHOVER, CUSTOMER
SATISFACTION, PERCEPTION, EXPECTATION AND PURCHASE INTENTION

Squares Square
Purchase Between Groups 481.702 3 160.567 1.399 .242
Total 74599.614 649
190
Within Groups 54026.725 646 83.633
Total 54257.625 649
Total 30158.494 649
Within Groups 228934.911 646 354.388
Total 230386.125 649
Within Groups 207791.560 646 321.659
Total 209381.514 649
Inference
It concludes that there is no difference between number of years availing the health insurance
policy respect to overall switchover, customer satisfaction, perception, expectation and purchase
intention.
TABLE 5.30

WITH RESPECT TO OVERALL SWITCHOVER, CUSTOMER SATISFACTION,

Squares Square
Purchase Between Groups 775.504 2 387.752 3.398 .034**
Total 74599.614 649
Switch Over Between Groups .159 2 .080 .001 .999
Within Groups 54257.465 647 83.860
Total 54257.625 649
191
Total 30158.494 649
Within Groups 229513.923 647 354.736
Total 230386.125 649
Within Groups 208587.599 647 322.392
Total 209381.514 649
Inference
Since p value is less than 0.05 for purchase intention, hence null hypothesis is rejected for
purchase intention.
It concludes that there is a difference between renewal status of health insurance policy with
respect to purchase intention.
TABLE 5.31
H14: There is no difference between nature of health insurance company with respect to overall
DIFFERENCE BETWEEN NATURE OF HEALTH INSURANCE COMPANY WITH


Squares Square
Total 74599.614 649
Within Groups 54018.968 647 83.491
Total 54257.625 649
Total 30158.494 649
192
Within Groups 229539.781 647 354.776
Total 230386.125 649
Within Groups 208300.364 647 321.948
Total 209381.514 649
Inference
It concludes that there is no difference between number of nature of health insurance company
intention.
5.18 CORRELATION ANALYSIS BETWEEN CUSTOMER ATTITUDE,
DEFICIENCIES, SWITCHOVER, CUSTOMER SATISFACTION, PERCEPTION,
TABLE 5.32
RELATIONSHIP BETWEEN CUSTOMER ATTITUDE, DEFICIENCIES,

PURCHASE INTENTION
Correlation 1 2 3 4 5 6 7
Pearson
1 .913** .253** .185** .871** .819** .744**
Deficiency Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
Pearson
.913** 1 .182** .166** .837** .959** .744**
Attitude Correlation
Sig. (2-tailed) .000 .000 .000 .000 0.000 .000
Pearson
.253** .182** 1 .011 .193** .169** .177**
Switch Over Correlation
Sig. (2-tailed) .000 .000 .772 .000 .000 .000
Pearson
Customer .185** .166** .011 1 .195** .147** .211**
Correlation
Satisfaction
Sig. (2-tailed) .000 .000 .772 .000 .000 .000
Expectations Pearson .871** .837** .193** .195** 1 .810** .926**
193
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
Pearson
.819** .959** .169** .147** .810** 1 .721**
Perception Correlation
Sig. (2-tailed) .000 0.000 .000 .000 .000 .000
Pearson
.744** .744** .177** .211** .926** .721** 1
Purchase Correlation
intention Sig. (2-tailed) .000 .000 .000 .000 .000 .000
N 650 650 650 650 650 650 650
**. Correlation is significant at the 0.01 level (2-tailed).
Inference
The above table concludes that correlation coefficient between deficiencies of the health
insurance services and customer attitudes is 0.913 which indicates 91% positive correlation is
existing between deficiencies of the health insurance services and customer attitudes. Correlation
coefficient between deficiencies of the health insurance services and brand switch over is 0.253,
which indicates 25% positive relation exist between deficiencies of the health insurance services
and brand switch over. Correlation coefficient between deficiencies of the health insurance
services and ustomer satisfaction is 0.185 which indicates 19% positive relation is existing
between deficiencies of the health insurance services and customer satisfaction. Correlation
coefficient between deficiencies of the health insurance services and customers expectation is
0.871 which indicates 87% positive relation is existing between deficiencies of the health
insurance services and customer expectations. Correlation coefficient between deficiencies of the
health insurance services and customer perception is 0.819 which shows 82% positive relation is
existing between deficiencies of the health insurance services and customer perception.
Correlation coefficient between deficiencies of the health insurance services and purchase
intention is 0.744 which means 74% positive relation is existing between deficiencies of the
health insurance services and purchase intention.
Correlation coefficient between customer attitudes and brand switch over is 0.182 which means
18% positive relation is existing between customer attitudes and brand switch over. Correlation
coefficient between customer attitudes and customer satisfaction is 0.166 which means 17%
positive relation is existing between customer attitudes and customer satisfaction. Correlation
194
coefficient between customer attitudes and customer expectation is 0.837 which shows 84%
positive relation is existing between customer attitudes and customer expectations. Correlation
coefficient between customer attitudes and customer perception is 0.959 which indicates 96%
positive relation is existing between customer attitudes and customer perception. Correlation
coefficient between customer attitudes and purchase intention is 0.744 which means 74%
positive relation is existing between customer attitudes and purchase intention.
Correlation coefficient between brand switch over and customer expectation is 0.193 which
means 19% positive relation is existing between customer attitudes and customer expectation.
Correlation coefficient between customer attitudes and customer perception is 0.169 which
means 17% positive relation is existing between customer attitudes and customer perception.
Correlation coefficient between customer attitudes and purchase intention is 0.177 which shows
18% positive relation exists between customer attitudes and purchase intention.
Correlation coefficient between customer satisfaction and customer expectation is 19.5% which
shows that 20% positive relation exists between brand switch over and customer expectation.
Correlation coefficient between customer satisfaction and customer expectations is 0.147 which
means 15% positive relation exists between customer satisfaction and customer perception.
Correlation coefficient between customer satisfaction and purchase intention is 0.211 which
shows 21% positive relation exists between customer satisfaction and purchase intention.
Correlation coefficient between customer expectations and customer perception is 0.810 which
means 81% positive relation exists between customer expectations and perception. Correlation
coefficient between customer expectations and purchase intention 0.926 which means 93%
positive relation exists between customer expectations and purchase intention. Correlation
coefficient between customer perception and purchase intention 0.721 which means 72%
positive relation exists between customer perception and purchase intention.
195
5.19 GAP BETWEEN PERCEPTION AND EXPECTATION OF CUSTOMERS
TABLE 5.33
GAP BETWEEN PERCEPTION AND EXPECTATION OF CUSTOMERS
Expected Perceived
Gap between perception and expectation of customers Gap
Mean Mean
Adequate numbers of branches 3.39 3.33 -0.06
Trained and well informed agents 3.46 3.46 0.00
Approaching from customers point of view 3.43 3.47 0.04
Accessible location of the branch 3.25 3.31 0.06
Staff depend enable in handling customer problems 3.44 3.40 -0.04
Good ambience of the branch 3.34 3.41 0.06
Efficient staff 3.47 3.37 -0.10
Easy access to information 3.56 3.28 -0.28
Provision of flexible payment schedule 3.45 3.39 -0.06
Innovativeness in introducing new products 3.39 3.36 -0.02
Possessing good certification and credentials 3.37 3.25 -0.12
Courteous agents 3.51 3.34 -0.16
Value for money 3.35 3.30 -0.06
Availability of flexible product solution 3.43 3.32 -0.11
Provisions for convertibility of products 3.42 3.18 -0.24
Supplementary services 3.35 3.48 0.13
Prompt & efficient grievance handling mechanism 3.31 3.42 0.11
Simple & less time consuming procedure for purchasing a
3.34 3.20 -0.14
policy
Trusting agents when explaining policies 3.41 3.39 -0.01
Financially stable company 3.40 3.34 -0.07
Clarity in explaining policy's terms and conditions 3.27 3.36 0.09
Easy online transaction 3.52 3.40 -0.13
Complaint handling should be prompt 3.40 3.41 0.01
Proactive information through email or SMS 3.23 3.37 0.14
Prompt and hassle free claims settlement 3.43 3.32 -0.12
Understanding intimately specific needs 3.29 3.38 0.09
Average 3.39 3.36 -0.04
196
Inference
Above table shows that Gap analysis between expected and perceived values. Maximum gap is
easy access to information (-0.28), Provisions for convertibility of products is the second
maximum gap (-0.24) and Courteous agents is the third maximum gap (-0.16). Besides, biggest
gaps call for the need for immediate attention by service provider to make improvements in these
areas.
5.20 PAIRED SAMPLE T TEST FOR PERCEPTION AND EXPECTATION RATINGS

OF HEALTH INSURANCE COMPANY
TABLE 5.34
H01: There is no significant evidence for the perception of the customers equal to the expectation
of the customers regarding Health Insurance Company
PERCEPTION OF THE CUSTOMERS ARE EQUAL TO EXPECTATION OF THE

CUSTOMERS REGARDING HEALTH INSURANCE COMPANY
Sig. (2-
Pairs Perception and expectation factors SD t df
tailed)
Adequate numbers of branches - Adequate
Pair 1 1.46 1.05 649 0.29
numbers of branches
Trained and well informed agents - Trained
Pair 2 1.43 0.05 649 0.96
and well informed agents
Approaching from customers point of view -
Pair 3 1.55 -0.71 649 0.48
Approaching from customers point of view
Accessible location of the branch - Accessible
Pair 4 1.57 -1.05 649 0.30
location of the branch
Staff depend enable in handling customer
Pair 5 problems - Staff depend enable in handling 1.48 0.69 649 0.49
customer problems
Good ambience of the branch - Good
Pair 6 1.55 -1.06 649 0.29
ambience of the branch
Pair 7 Efficient staff - Efficient staff 1.58 1.66 649 0.10
Easy access to information - Easy access to
Pair 8 1.66 4.23 649 0.00**
information
Provision of flexible payment schedule -
Pair 9 1.49 1.05 649 0.29
Provision of flexible payment schedule
Pair 10 Innovativeness in introducing new products - 1.68 0.37 649 0.71
197
Innovativeness in introducing new products
Possessing good certification and credentials -

Pair 11 1.55 1.97 649 0.05**
Possessing good certification and credentials
Pair 12 Courteous agents - Courteous agents 1.55 2.66 649 0.01**
Pair 13 Value for money - Value for money 1.47 0.96 649 0.34
Sig. (2-
Pairs Perception and expectation factors SD t df
tailed)
Availability of flexible product solution -
Pair 14 1.63 1.78 649 0.08
Availability of flexible product solution
Provisions for convertibility of products -
Pair 15 1.58 3.88 649 0.00**
Provisions for convertibility of products
Supplementary services - Supplementary
Pair 16 1.60 -2.13 649 0.03**
services
Prompt & efficient grievance handling
Pair 17 mechanism - Prompt & efficient grievance 1.50 -1.88 649 0.06**
handling mechanism
Simple & less time consuming procedure for
Pair 18 purchasing a policy - Simple & less time 1.52 2.29 649 0.02**
consuming procedure for purchasing a policy
Trusting agents when explaining policies -
Pair 19 1.51 0.23 649 0.82
Trusting agents when explaining policies
Financially stable company - Financially stable
Pair 20 1.65 1.07 649 0.29
company
Clarity in explaining policy's terms and
Pair 21 conditions - Clarity in explaining policy's terms 1.57 -1.48 649 0.14
and conditions
Easy online transaction - Easy online
Pair 22 1.65 1.95 649 0.05**
transaction
Complaint handling should be prompt -
Pair 23 1.57 -0.20 649 0.84
Complaint handling should be prompt
Proactive information through email or SMS -
Pair 24 1.59 -2.23 649 0.03**
Proactive information through email or SMS
Prompt and hassle free claims settlement -
Pair 25 1.52 1.95 649 0.05**
Prompt and hassle free claims settlement
Understanding intimately specific needs -
Pair 26 1.54 -1.47 649 0.14
Understanding intimately specific needs
198
Inference
Above table infers that p value is less than 0.05 for pair 8, pair 11, pair12, pair15, pair16, pair17,
pair 22, pair 24 and pair 25. Hence null hypothesis rejected for all above mentioned pairs.
It concludes that there is significant evidence that pair 8, pair 11, pair12, pair15, pair16, pair17,
pair 22, pair 24 and pair 25 are equal.
5.21 MULTIPLE REGRESSION ANALYSIS

The multiple regressions are applied to analyze the customers attitude, perception, expectation,
and purchase intention as independent variables against a separate measure of satisfaction as the
dependent variable. The items are summed up to reproduce the customers attitude, perception,
expectation, and purchase intention which is analyzed separately against the overall satisfaction
of the health insurance company as follows;
TABLE 5.35
OVERALL SATISFACTION OF THE HEALTH INSURANCE COMPANY
Mean
ANOVA Sum of Squares Df F Sig.
Square
Regression 3719.093 4 929.773 209.448 .000
Residual 2863.253 645 4.439
Total 6582.346 649
a. Dependent Variable: Satisfaction

b. Predictors: (Constant), Attitude, Purchase Intention, Perception, Expectation
The above table shows tests related to the acceptability of model from a statistical perspective.
The ANOVA table shows F-Ratio for the regression model which indicates statistical
significance of the Overall regression model. The F-ratio is the result of comparing the amount
of explained variance to unexplained variance.
199
The F-value is the mean square regression divided by the Mean Square Residual, yielding
F=209.448 .The p-value associated with this F value is very small. The significance value of the
F-Statistic is less than 0.05. In this table the significance variable is less than 0.05 so that the
group of variables attitude, expectations, perception and purchase intention (a) can be used to
reliably predict overall satisfaction of health insurance company (the dependent variable).
TABLE 5.36
SUMMARY OF REGRESSION MODEL
Std. Error of the

R R Square Adjusted R Square
Estimate
.752 .565 .562 2.107
The above table shows the reports of relationship between the dependent variable (Overall
customer satisfaction) and customers attitude, perception, expectation, and purchase intention as
independent variables of health insurance companies. Multiple R is the correlation coefficient (at
this step) for the simple regression of purchase intention (X1), perception (X2), expectation (X3),
attitude (X4) and the dependent variable of overall customer satisfaction (Y). R - R is the square
root of R-Squared and is the correlation between the observed and predicted values of the
dependent variable. The strength of correlation coefficient is 0.752. There is a strong positive
strength of correlation between the observed variable X1, X2, X3, X4 and predicted values of the
dependent variable (Y).The R-square shows the percentage of variation in one variable that is
accounted by another variable. In this case the customers attitude, perception, expectation, and
purchase intention accounts values of 57% of the health insurance companies. R square (R2) is
the correlation coefficient squared; also it is referred as the coefficient of determination. The
adjusted R-square attempts to yield an honest value to estimate the R-squared for the
population. The value of the adjusted R - square is 0.562.
200
5.22 REGRESSION COEFFICIENT FOR IMPACT OF OVERALL CUSTOMER
SATISFACTION OF HEALTH INSURANCE COMPANIES ON CUSTOMERS
ATTITUDE, PERCEPTION, EXPECTATION, AND PURCHASE INTENTION.
The above table shows the regression coefficient for independent variables of the health
insurance. These are the values for the regression equation for predicting dependent variable,
Overall Satisfaction of health insurance companies (Y) from the independent variable(s) of
customer attitude, expectation, perception and purchase intention. The t-test examines the
question whether the regression coefficient is different from zero to be statically significant or
not. In this step, four independent variables are used to calculate the regression equation for the
dependent variable. The coefficient table shows result for constant component in the regression
equation. The column labeled significance shows statistical significance of the regression co-
efficient for independent variable as measured by t-test.
TABLE 5.37
IMPACT OF OVERALL CUSTOMER SATISFACTION OF HEALTH INSURANCE

COMPANIES ON CUSTOMERS ATTITUDE, PERCEPTION, EXPECTATION, AND
PURCHASE INTENTION
Un standardized Standardized
t Sig.
Coefficients Coefficients Coefficients
B Std. Error Beta

(Constant) -8.265 1.765 -4.684 .000**
Purchase Intention .022 .023 .035 .978 .328
Perception .378 .027 .495 14.177 .000**
Expectation .369 .047 .303 7.821 .000**

Attitude .001 .004 .005 .202 .840
** Significance at 5%
The coefficient table shows two predictors in the model of Bank. The two significant coefficients
for health insurance companies are perception and expectations, non-significant coefficients are
purchase intention and attitude. Since these non-significant coefficients exceed 0.05 indicating
201
that these variables do not contribute much to the model. It also shows that the relative
importance of significant predictors is determined by looking at the standardized coefficient.
Perception has the highest standardized coefficient with the lowest significance (p=0.05) which
means that perception is the main predictor of overall customer satisfaction. The predicted
value (regression equation) is,
Y (customer satisfaction) = -8.265 + 0.378* (perception) + 0.369* (expectation)
202
FIGURE 5.2
STRUCTURAL EQUATION MODELING FOR CUSTOMER
SATISFACTION
TABLE 5.38
RESULTS AND FIT INDICES FOR MODEL EVALUATION
Fit indices Acceptable value Results

Chi square value <3 5.979
Chi square value/ df <3 2.989
Goodness of fit index (GFI) > 0.9 0.996
Root mean square error approximation (RMSEA) < 0.08 0.055
Normed fit index (NFI) > 0.9 0.998
203
Relative fit index (RFI) > 0.9 0.992
Comparative fit index (CFI) > 0.9 0.999
The above table shows the fit indices, acceptable values, and analytical results for the overall
model. According to the above table, all fit indices of the model, with acceptable values, are
eligible and this shows that the general model is acceptable.
CHI SQUARE TEST
5.23 NATURE OF HEALTH INSURANCE COMPANIES AND LOCATION OF
RESPONDENTS
The researcher categorized the nature of health insurance companies in three types they are
government health insurance companies, private health insurance companies, stand - alone health
insurance companies. The chi square test is administered to test the following hypothesis.
TABLE 5.39
ASSOCIATION BETWEEN LOCATION OF THE RESPONDENTS AND NATURE OF

THE HEALTH INSURANCE COMPANIES
H01: There is no association between location of the respondents and nature of the health
Nature of health insurance company
Cross Government Private Stand alone
Total Chi square value P value
tab insurance insurance insurance
company company company
Urban 151 207 111 469
Rural 69 82 30 181 4.424 0.11
Total 220 289 141 650
204
Inference
The above table shows that p value is greater than 0.05, hence null hypothesis is accepted.
It concludes that there is no association between location of the respondents and nature of the
health insurance companies. Many private insurance policies respondents are from urban area.
5.24 NATURE OF HEALTH INSURANCE COMPANIES AND AGE OF
RESPONDENTS
TABLE 5.40
NATURE OF HEALTH INSURANCE COMPANIES AND AGE OF RESPONDENTS
H02: There is no association between age of the respondents and nature of the health insurance
companies.

Chi
Government Private Stand alone
Cross tab Total square P value
insurance insurance insurance
value
Below 30 years 102 152 58 312
31-40 years 62 92 55 209
41-50 years 48 36 27 111 15.672 0.016**
Above 50 years 8 9 1 18
Total 220 289 141 650
** Significance at 5% level
Inference
The above table shows that p value is less than 0.05 for age, hence null hypothesis rejected.
205
It concludes that there is an association between age of the respondents and nature of the health
insurance companies. Most of the private health insurance respondents fall under 30 years old.
206
5.25 NATURE OF HEALTH INSURANCE COMPANIES AND GENDER OF
RESPONDENTS
TABLE 5.41
ASSOCIATION BETWEEN GENDER OF THE RESPONDENTS AND NATURE OF

THE HEALTH INSURANCE COMPANIES
H03: There is no association between gender of the respondents and nature of the health
Stand
Government Private
Cross tab alone Total Chi square value P value
insurance insurance
insurance
company company
company
Male 115 164 89 368
Female 105 125 52 282 4.12 0.127
Total 220 289 141 650
Inference
It concludes that there is no association between gender of the respondents and nature of the
health insurance companies. Most of the private insurance policy respondents are male.
207
5.26 NATURE OF HEALTH INSURANCE COMPANIES AND EDUCATIONAL
QUALIFICATION OF RESPONDENTS
TABLE 5.42
ASSOCIATION BETWEEN QUALIFICATION OF THE RESPONDENTS AND

NATURE OF THE HEALTH INSURANCE COMPANIES
H04: There is no association between qualification of the respondents and nature of the health
Stand
Government Private
insurance insurance
insurance
company company
company
School 37 67 29 133
Graduate 125 157 73 355
Post
28 31 23 82
graduate 5.72 0.455
Professional
30 34 16 80
degree
Total 220 289 141 650
Inference
208
It concludes that there is no association between educational qualification of the respondents and
nature of the health insurance companies. Most of the private insurance policy respondents are
having gradation level educational qualification.
5.27 NATURE OF HEALTH INSURANCE COMPANIES AND OCCUPATION OF
RESPONDENTS
The researcher categorized the nature of health insurance companies in three types. They are:
TABLE 5.43
H05: There is no association between occupation of the respondents and nature of the health
ASSOCIATION BETWEEN OCCUPATION OF THE RESPONDENTS AND NATURE

OF THE HEALTH INSURANCE COMPANIES

Stand
Government Private
insurance insurance
insurance
company company
company
Self
35 50 39 124
employed
Professional 40 42 17 99
Government 77 77 47 201
Employed in 22.299 0.014**
private 34 65 16 115
concern
Agriculture 7 7 3 17
Others 27 48 19 94
209
Total 220 289 141 650
** Significance at 5% level
Inference
Since p value is less than 0.05 for occupations, hence null hypothesis is rejected.
It concludes that there is an association between occupation of the respondents and nature of the
5.28 NATURE OF HEALTH INSURANCE COMPANIES AND MARITAL STATUS OF
RESPONDENTS
The researcher categorized the nature of health insurance companies in three types. they
are; government health insurance companies, private health insurance companies, stand - alone
health insurance companies. The chi square test is administered to test the following
hypothesis.
TABLE 5.44
H06: There is no association between marital status of the respondents and nature of the health
ASSOCIATION BETWEEN MARITAL STATUS OF THE RESPONDENTS AND


Stand
Government Private
insurance insurance
insurance
company company
company
Married 205 260 131 596
Unmarried 15 29 10 54 2.046 0.36
Total 220 289 141 650
210
Inference
It concludes that there is no association between marital status of the respondents and nature of
the health insurance companies. Most of the private insurance policy respondents are married.
5.29 NATURE OF HEALTH INSURANCE COMPANIES AND FAMILY TYPE OF
RESPONDENTS
TABLE 5.45
H07: There is no association between family type of the respondents and nature of the health
ASSOCIATION BETWEEN FAMILY TYPE OF THE RESPONDENTS AND NATURE


Stand
Government Private
Cross tab alone Total Chi square test P value
insurance insurance
insurance
company company
company
Joint
102 152 58 312
family
Nuclear 5.343 0.069
118 137 83 338
family
Total 220 289 141 650
Inference
211
It concludes that there is no association between family type of the respondents and nature of the
health insurance companies. Most of the private insurance policy respondents belong to joint
family.
5.30 NATURE OF HEALTH INSURANCE COMPANIES AND DEPENDENTS OF
RESPONDENTS
The researcher categorized the nature of health insurance companies in three types they
are government health insurance companies, private health insurance companies, stand - alone
hypothesis.
TABLE 5.46
H08: There is no association between dependents of the respondents and nature of the health
ASSOCIATION BETWEEN DEPENDENTS OF THE RESPONDENTS AND NATURE


Cross tab Total Chi square value P value
1-2
110 131 65 306
members
2-3
46 70 39 155
members
2.876 0.824
3-4
17 23 10 50
members
Above 4
47 65 27 139
members
212
Total 220 289 141 650
Inference
It concludes that there is no association between number of dependents of the respondents and
nature of the health insurance companies. Most of the private insurance policy respondents have
1-2 dependents in their family.
5.31 NATURE OF HEALTH INSURANCE COMPANIES AND MONTHLY INCOME
OF RESPONDENTS
The researcher categorized the nature of health insurance companies in three types they
are government health insurance companies, private health insurance companies, stand - alone
hypothesis.
TABLE 5.47
H09: There is no association between monthly income of the respondents and nature of the health
ASSOCIATION BETWEEN MONTHLY INCOME OF THE RESPONDENTS AND


Stand
Government Private
insurance insurance
insurance
company company
company
Up to
11 15 7 33 4.866 0.561
Rs.10000
213
Rs.10001-
52 78 44 174
20000
Rs.20001-
89 106 42 237
30000
Rs.30001-
68 90 48 206
50000
Total 220 289 141 650
Inference
It concludes that there is no association between monthly income of the respondents and nature
of the health insurance companies. Most of the private insurance policy respondents earn
Rs.20001-30000 rupees as their monthly income.
53.2 NATURE OF HEALTH INSURANCE COMPANIES AND INSURANCE TYPE OF
RESPONDENTS
TABLE 5.48
H10: There is no association between insurance type of the respondents and nature of the health
ASSOCIATION BETWEEN INSURANCE TYPE OF THE RESPONDENTS AND


Government Private Stand
Cross tab Total Chi square value P value
insurance insurance alone
company company insurance
214
company
Individual 42 58 17 117
Family 47 64 37 148
4.838 0.304
Group 131 167 87 385
Total 220 289 141 650
Inference
It concludes that there is no association between type of insurance policy of the respondents and
nature of the health insurance companies. Most of the private insurance policy respondents use
insurance policy for groups.
5.33 NATURE OF HEALTH INSURANCE COMPANIES AND SUM INSURED
TABLE 5.49
H11: There is no association between sum insured under the insurance policy and nature of the
ASSOCIATION BETWEEN SUM INSURED UNDER THE INSURANCE POLICY AND


Cross tab Government Private Stand alone Total Chi square test P value
215
Rs.100000-
42 58 17 117
200000
Rs.200000-
47 64 37 148
300000
Rs.300000- 5.757 0.451
70 96 45 211
400000
Rs.400000-
61 71 42 174
500000
Total 220 289 141 650
Inference
It concludes that there is no association between sum assured under the health insurance policy
and nature of the health insurance companies. Most of the private insurance policy respondents
sum assured under the health insurance policy is Rs.300000-400000.
5.34 NATURE OF HEALTH INSURANCE COMPANIES AND RENEWAL STATUS
TABLE 5.50
H12: There is no association between renewal status of the insurance policy and nature of the
ASSOCIATION BETWEEN RENEWAL STATUS OF THE INSURANCE POLICY AND

216
Chi
Governmen Private
Cross tab Stand alone Total square P value
t insurance insurance
insurance company test
company company
Regular 25 38 18 81
Discontinued 137 185 87 409
1.128 0.89
Gap in renewal 58 66 36 160
Total 220 289 141 650
Inference
It concludes that there is no association between renewal status of the health insurance policy
and nature of the health insurance companies. Most of the private insurance policy respondents
follow discontinued renewal status.
5.35 NATURE OF HEALTH INSURANCE COMPANIES AND NUMBERS OF YEARS
AVAILING
TABLE 5.51
H13: There is no association between number of years availing the insurance policy and nature of
the health insurance companies.
ASSOCIATION BETWEEN NUMBER OF YEARS AVAILING THE INSURANCE

POLICY AND NATURE OF THE HEALTH INSURANCE COMPANIES
217
Chi
value
One year 105 118 59 282
Two to three
45 77 42 164
years
Four to five
25 35 19 79 6.923 0.328
years
Above five
45 59 21 125
years
Total 220 289 141 650
Inference
It concludes that there is no association between number of years availing the health insurance
policy and nature of the health insurance companies. Most of the private insurance policy
respondents avail health insurance policy for one year only.
5.36 NATURE OF HEALTH INSURANCE COMPANIES AND REIMBURSEMENT
CLAIMING TIME
TABLE 5.52
H14: There is no association between time taken for Reimbursement claim by insurance company
and nature of the health insurance companies.
218
ASSOCIATION BETWEEN TIME TAKEN FOR REIMBURSEMENT CLAIM BY
INSURANCE COMPANY AND NATURE OF THE HEALTH INSURANCE
COMPANIES

Chi
value
Less than 15
0 1 1 2
days
Less than 1
21 42 22 85
month
Less than 2
51 57 32 140
months
More than 2
148 189 86 423
months
Total 220 289 141 650
Inference
It concludes that there is no association between time taken for reimbursement claim by
insurance company and nature of the health insurance companies. Most of the private insurance
policy respondents feel that time taken for reimbursement claim by insurance company is more
than 2 months.
5.37 DIFFERENCE BETWEEN TIME TAKEN FOR REIMBURSEMENT CLAIM BY

INSURANCE COMPANY WITH RESPECT TO OVERALL SATISFACTION,
ATTITUDE, PERCEPTION, EXPECTATION, DEFICIENCIES, PURCHASE
INTENTION AND SWITCH OVER
219
TABLE 5.53
H01: There is no difference between time taken for reimbursement claim by insurance company
with respect to overall satisfaction, attitude, perception, expectation, deficiencies, purchase
intention and switch over.
220
DIFFERENCE BETWEEN TIME TAKEN FOR REIMBURSEMENT CLAIM BY
INSURANCE COMPANY WITH RESPECT TO OVERALL SATISFACTION,
ATTITUDE, PERCEPTION, EXPECTATION, DEFICIENCIES, PURCHASE
INTENTION AND SWITCH OVER

Squares Square
Purchase Between 1291.043 3 430.348 3.792 .010**
intention Groups
Within Groups 73308.571 646 113.481
Total 74599.614 649
Deficiency Between 5232.971 3 1744.324 8.562 .000**
Groups
Within Groups 131601.435 646 203.717
Total 136834.406 649
Attitude Between 7549.451 3 2516.484 5.068 .002**
Groups
Within Groups 320785.905 646 496.573
Total 328335.355 649
Groups
Within Groups 40344.669 646 62.453
Total 54257.625 649
Customer Between 45.954 3 15.318 .329 .805
Satisfaction Groups
Within Groups 30112.539 646 46.614
Total 30158.494 649
Expectations Between 5744.986 3 1914.995 5.507 .001**
Groups
Within Groups 224641.139 646 347.742
Total 230386.125 649
Perception Between 4080.395 3 1360.132 4.280 .005**
Groups
Within Groups 205301.119 646 317.804
Total 209381.514 649
221
Inference
Since p value is less than 0.05 for attitude, perception, expectation, deficiencies, purchase
intention and switch over, hence null hypothesis is rejected for attitude, perception, expectation,
deficiencies, purchase intention and switch over.
It concludes that there is a difference between time taken for reimbursement claim by insurance
company with respect to attitude, perception, expectation, deficiencies, purchase intention and
switch over.
5.38 DESCRIPTIVE AND CRONBACHS ALPHA COEFFICIENTS OF THE
MEASURING INSTRUMENT
TABLE 5.54
DESCRIPTIVE AND CRONBACHS ALPHA COEFFICIENTS OF THE MEASURING
INSTRUMENT
Std.
Factors Mean Skewness Kurtosis Cronbach's Alpha no of items
Deviation
Deficiency 75.38 14.52 -0.18 -0.69 0.875 22
Attitude 110.83 22.49 -0.16 -0.49 0.924 34
Switch Over 48.29 9.14 -0.34 -0.52 0.883 13
Customer
33.34 6.82 -0.26 -0.48 0.717 10
Satisfaction
Expectations 88.21 18.84 -0.33 -0.48 0.917 26
Perception 87.24 17.96 -0.16 -0.44 0.906 26
Purchase
50.38 10.72 -0.26 -0.22 0.856 15
intention
Inference
The results in above indicate that all above mention factors was acceptable Cronbach alpha
coefficient values above the 0.7 guideline provided by Nunnally and Bernstein (1994).
222
CHAPTER VI
FINDINGS, SUGGESTIONS AND CONCLUSION

6.1 INTRODUCTION
The study focuses on the measurement of perception, attitude and satisfaction towards the
services of health insurance. It is divided into four important stages. The first stage covers the
personal, social and economic profile of the policy holders of health insurance. The second stage
of the study includes various aspects of attitude and perception of policy holders of health
insurance. The third stage of the study concentrates on the measurement of perception and
expectations of policy holders. The final stage includes the level of satisfaction towards services
of health insurance companies. The objectives of the study are (i) To exhibit demographic profile
of Health Insurance policyholders in Erode district (ii) To examine the attitude of customers
towards Health Insurance policy(iii) To study the customers perception towards services
provided by the health insurance companies (iv) To examine the buying motives that influence
the customers to purchase Health insurance policy (v) To measure the level of satisfaction among
the customers towards Health Insurance policy (VI) To find out the problems faced by the
customers in Health Insurance and(VII) To offer suggestions for improving the penetration level
of Health Insurance companies in Erode district based on the results of the study.
In order to fulfill the objectives of the study, the policy holders of insurance companies
from public and private health companies were selected from Erode district. The total population
of the present study is not available. The total number of sample size is 650. Out of 650
respondents 469 respondents from urban areas and 181 respondents from rural areas of Erode
had been taken as a sample for the present study. The secondary data were collected from the
company records, reports published by the company and government records published in the
websites. The primary data have been collected with the help of structured questionnaire. The
structured questionnaire had been prepared on the basis of the objectives of the study. It is
divided into four important parts. The first part of the questionnaire covers the personal, social
and economic profile of the policy holders of health insurance and their purchase pattern of
health insurance policy. The second part of the questionnaire includes various aspects of attitude
and perception of health insurance policy holders. The part three of the questionnaire
223
concentrates on the measurement of expectation and perceived services of the health insurance
companies and deficiencies in the health insurance companies policy. The part four of the
questionnaire includes the non-managerial employees opinions towards switch over from one
company to another. A pilot-study was conducted among 50 policy holders of health insurance.
Based on the feedback from the above, certain modifications, additions and deletions had been
carried out to prepare the final questionnaire. The collected data were processed with the help of
appropriate statistical analysis. The results and interpretations have been discussed in the
previous chapters. This chapter presents the summary of findings, conclusions and suggestions.
6.2 SUMMARY OF FINDINGS
6.2.1 Demographic profile
Location and age 72.2% of the respondents are from urban area and only 27.8%
respondents are from rural area. 48.0% belong to below 30 years old, 32.2% respondents belong
to 31-40 years.
Gender and Qualification - 56.6% of the respondents are male and 43.4% respondents
are females. In the sample 54.6% of the respondents have UG level educational qualification.
Occupation - 30.9% of the respondents are government employees, only14.5%
respondents are doing agricultural work.
Marital status and Family type - 91.7% of the respondents are married and only 8.3%
respondents are unmarried.52.0% of the respondents belong to nuclear family.
Number of dependents - 47.1% of the respondents have 1-2 members in their family.
Monthly Income and insurance type- 36.5% of the respondents are getting Rs.20001-
30000 and 31.7% respondents are getting Rs.30001-50000 as a monthly income. 59.2% of the
respondents are using health insurance policy for group.
Sum insured under the health insurance policy 32.5% of the respondents insured sum
of Rs.300000-400000 and 26.8% respondents insured sum of Rs.400000-500000 under the
health insurance policy.
Number of years availing health insurance - 43.4 of the respondents are availing health
insurance policy for one year, 25.2% respondents availing health insurance policy for two to
three years.
224
Renewal status of health insurance policy - 62.9% of the respondents discontinue
renewal their health insurance policy and 24.6% respondents renewal of their health insurance
policy.
Nature of Health Insurance Company - 44.5% of the respondents are having the policy
in private insurance companies, 33.8% of the respondents nature of government based insurance
companies and 21.7% respondents using stand-alone insurance companies.
6.2.2 Descriptive Analysis
Hospital play a major role in creating awareness about the health insurance companies
(3.38); and insurance agent is the second ranked source that created awareness about the health
insurance company (3.36); employers of the respondents are the third ranked source of
awareness about the health insurance companies (3.33); educational institutions are the fourth
ranked sources (3.32); advertisements about the health insurance companies are the fifth source
(3.30), friends and relatives are the sixth ranked source (3.28); NGOs are the seventh ranked
source of creating awareness about health insurance companies (3.24); televisions, broachers &
pamphlets are the last ranked source of awareness factors for health insurance companies.
To meet out medical expenses is the first ranked purchase intention factor with the mean
value of 3.50, family history and fear of disease is the third ranked factor, tax exemption,
protection, for foreign travel / trip and employer are the sixth ranked purchase intention
factors with the mean value of 3.37, avoid risk and due to age are the ninth ranked purchase
intention facets with the mean value of 3.33, agent and prone to for disease is the eleventh
ranked purchase intention factor with the mean value of 3.32, student is the next ranked factor
with mean value of 3.31, medical expenses are high, and fear due to past experience are the
last ranked purchase intention factors with the mean value of 3.302, 3.30 and 3.25.
The respondents have Not satisfaction with the agents is the top ranked switch over
cost with the mean value of 4.13, competition premium is the second top ranked switch over
cost with the mean value of 3.99, poor follow up is the third ranked switch over cost with the
mean value of 3.93, better schemes is the fourth ranked switch over cost with the mean value
of 3.83, transparency and unnecessary queries are the fifth ranked switch over cost with the
mean value of 3.75, delay and deductions are the sixth and seventh ranked switch over cost
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with the mean value of 3.68 and 3.64. Better benefits and poor servicing are the eighth and
ninth ranked switch over cost with the mean value of with mean value of 3.63 and 3.53.
Poor claim settlement, and attractive premiums are the last ranked switch over cost with
the mean value of 3.52, 3.50 and 3.40.
The claim processing is the top ranked customer satisfaction factor with the mean value
of 3.51, financial strength of the insurance company is the second ranked customer satisfaction
factor with the mean value of 3.41. Image of the health insurance company is the third ranked
customer satisfaction factor with the mean value of 3.39, customer service and trustworthy
and honesty of the insurance agents are the fifth ranked customer satisfaction factor with the
mean value of 3.32.
Problem solving by the health insurance company, better benefits offered by the health
insurance company is the seventh ranked customer satisfaction factor with the mean value of
3.30. Value of the money is the eighth ranked customer satisfaction factor with the mean value
of 3.29, attractive premium is the ninth ranked customer satisfaction factor with the mean
value of 3.28 and different variety of plans and better schemes are the last ranked customer
satisfaction factor with the mean value of 3.21.
6.2.3 T-Test
The study concluded that there is no difference between locations of the respondents with
respect to advertisement, friends and family, TV, employer, brochures and pamphlets, insurance
agents, educational institutions and NGO. There is a difference between locations of the
respondents with respect to hospitals as the source of awareness for health insurance companies.
There is a difference between ages of the respondents with respect to insurance agents.
Remaining variables dont have difference between ages of the respondents with respect to
different source of awareness for health insurance companies. The study concluded that there is
no difference between gender of the respondents with respect to advertisement, friends and
family, TV, employer, brochures and pamphlets, insurance agents, educational institutions,
hospitals and NGO.
There is no difference between family type of the respondents with respect to
advertisement, friends and family, TV, employer, broachers and pamphlets, insurance agents,
educational institutions, hospitals and NGO. It is concluded that there is no difference between
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number of dependents of the respondents with respect to advertisement, friends and family, TV,
NGO.
It concludes that there is difference between marital status of the respondents with respect
to Agents and employees who instill confidence in customers by proper behavior, willingness to
individual attention to customers keeping the customers best interests at heart.
It concludes that there is difference between number of dependents of the respondents
with respect to proving prompt service to customers, attractive and informative media theme
and competence to answer customers specific queries and requests, agents and employees who
understand the specific needs of their customers and apprising the customers of the nature and
schedule of service available in the organization.
It concludes that there is no difference between monthly income of the respondents with
respect to various factors extracted from attitude variables.
FACTOR ANALYSIS
The result indicated that the sample taken was appropriate to proceed with a factor
analysis procedure. Besides the Bartletts Test of Sphericity and the KMO Measure of sampling
Adequacy, Communality values of all variables were also observed. Seven factors were
identified as being maximum percentage variance accounted. Appropriate behavior of the
concerned staff, wide use of modern and alternative mode of premium payment such as
electronic clearing system, payment through internet etc., convenient location of the branch
offices and adequate and necessary facility for good customer services are grouped as a factor I
(staff behavior). Branch layouts been designed to give more space to the customers to transact
business, comfortable physical layout of premises, furnishings and ambient conditions (e.g.
Temperature, ventilation, noise, odor) for the customer to interact with official staff and
promotes ethical conduct in everything it does are grouped as a factor II (branch
ambience).Proving prompt service to customers, attractive and informative media and theme
and competence to answer customers specific queries and requests are grouped as a factor III
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(service quality). Agents and employees who instill confidence in customers by proper behavior,
willingness to help customers and the readiness to respond to customers request and giving
caring and individual attention to customers by having the customers best interests at heart are
grouped as a factor IV (agent behavior). Making customers feel safe and secure in their
transactions, effective customers grievance redressal procedures and availability of top official
on case of need heart are grouped as a factor V (handling grievances).Ability of agents to give
truthful advice on investments/ tax benefits and convenient to pay premium on due date are
grouped as a factor VI (payment system).Agents and employees who understand the specific
needs of their customers and apprising the customers of the nature and schedule of service
available in the organization are grouped as a factor VII (need based).
Three factors were identified as being maximum percentage variance accounted.
Capping/ limits in benefits, Officials with no faith in customs, Complex terms, Lack of publicity,
Poor treatment of officials, More exclusion, Miss selling by the agents, Non cooperative
officials, and Un remunerative price and Improper response are grouped as a factor I. Lack of
financial assistance in time, Commitment to hospital, Delay in operations, Product knowledge,
Documentation, Delayed payments and unnecessary queries are grouped as a factor II. Poor
accessibility and High commission charges are grouped as a factor III. Rigid procedure is the
factor IV.
The study inferred that there is no difference between locations of the respondents with
ANOVA
It is inferred that there is no difference between qualification of the respondents with
respect to advertisement, friends and family, TV, employer, broachers and pamphlets, insurance
agents, educational institutions, hospitals and NGO. The study concludes that there is a
difference between occupation of the respondents with respect to advertisement about insurance
company and policy. Remaining variables dont have difference between ages of the respondents
with respect to different source of awareness for health insurance companies.
It is concluded that there is a difference between marital status of the respondents with
respect to advertisement about insurance company and policy. Remaining variables dont have
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difference between ages of the respondents with respect to different source of awareness for
It is concluded that there is no difference between monthly income of the respondents
with respect to advertisement, friends and family, TV, employer, broachers and pamphlets,
insurance agents, educational institutions, hospitals and NGO. There is a difference between type
of insurance with respect to educational institutions, friends and relatives. There is a difference
between sum insured under the health insurance policy with respect to educational institutions,
friends and relatives.
It is concluded that there is no difference between number of years availing the health
insurance policy with respect to advertisement, friends and family, TV, employer, broachers and
There is no difference between renewal status of health insurance policy with respect to
advertisement, friends and family, TV, employer, broachers and pamphlets, insurance agents,
educational institutions, hospitals and NGO. There is a difference between nature of health
insurance company with respect to educational institutions and hospital.
Moreover, it is concluded that there is no difference between locations of the respondents
with respect to various factors extracted from attitude variables. It concludes that there is a
difference between ages of the respondents with respect to proving prompt service to customers,
attractive and informative media and theme layout, language of the advertisement and agents and
employees who have proper knowledge and competence to answer customers specific queries
and requests, ability of agents to give truthful advice on investments/ tax benefits and convenient
to pay premium on due date.
Furthermore it is concluded that there is no difference between educational qualifications
of the respondents with respect to various factors extracted from attitude variables. There is a
difference between gender of the respondents with respect to appropriate behavior of the
concerned staff, wide use of modern and alternative mode of premium payment such as
electronic clearing system, payment through internet etc., convenient location of the branch
offices and adequate and necessary facility for good customer services, Agents and employees
who instill confidence in customers by proper behavior, willingness to help customers and the
readiness to respond to customers request and giving caring and individual attention to customers
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by having the customers best interests at heart, Making customers feel safe and secure in their
transactions, effective customers grievance redressal procedures and availability of top official
on case of need heart, Ability of agents to give truthful advice on investments/ tax benefits and
convenient to pay premium on due date.
However, it is concluded that there is a difference between occupations with respect to
Agents and employees who understand the specific needs of their customers and apprising the
customers of the nature and schedule of service available in the organization.
Moreover, it is concluded that there is difference between numbers of dependents of the
respondents with respect to proving prompt service to customers, attractive and informative
media and theme layout and language of the advertisement and agents and employees who have
proper knowledge and competence to answer customers specific queries and requests.
The study also concludes that there is no association between location of the respondents
and nature of the health insurance companies. Many private insurance policies respondents are
from urban area.
Moreover, it concludes that there is an association between age of the respondents and
nature of the health insurance companies. Most of the private health insurance respondents are
falls under 30 years old.
There is no association between gender of the respondents and nature of the health
insurance companies. Most of the private insurance policy respondents are male. The study
concludes that there is no association between educational qualification of the respondents and
nature of the health insurance companies. Most of the private insurance policy respondents are
having gradation level educational qualification.
The study also concludes that there is an association between occupation of the
respondents and nature of the health insurance companies.
There is no association between marital status of the respondents and nature of the health
insurance companies. Most of the private insurance policy respondents are married.
The study also concludes that there is no association between family type of the
respondents and nature of the health insurance companies. Most of the private insurance policy
respondents belong to joint family.
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There is no association between number of dependents of the respondents and nature of
the health insurance companies. Most of the private insurance policy respondents have 1-2
dependents in their family.
Moreover, the study found these is no association between monthly income of the
respondents and nature of the health insurance companies. Most of the private insurance policy
respondents earn Rs.20001-30000 rupees as their monthly income. It concludes that there is no
association between type of insurance policy of the respondents and nature of the health
insurance companies. Most of the private insurance policy respondents use insurance policy for
groups.
There is no association between sum assured under the health insurance policy and nature
of the health insurance companies. Most of the private insurance policy respondents sum assured
under the health insurance policy is Rs.300000-400000.
The study also concludes that there is no association between renewal status of the health
insurance policy and nature of the health insurance companies. Most of the private insurance
policy respondents follow discontinued renewal status.
It concludes that there is no association between number of years availing the health
insurance policy and nature of the health insurance companies. Most of the private insurance
policy respondents avail health insurance policy for one year only.
Moreover it also concludes that there is no association between time taken for
reimbursement claim by insurance company and nature of the health insurance companies. Most
of the private insurance policy respondents feel that time taken for reimbursement claim by
insurance company is more than 2 months.
There is a difference between time taken for reimbursement claim by insurance company
with respect to attitude, perception, expectation, deficiencies, purchase intention and switch over.
The null hypothesis is rejected for first, third and fourth deficiencies extracted factors. It
concludes that there is a difference between age of the respondents and capping / limits in
benefits, officials with no faith in customs, complex terms, lack of publicity, poor treatment of
officials, more exclusion, miss selling by the agents, non-cooperative officials, un remunerative
price, improper response, lack of financial assistance in time, commitment to hospital, delay in
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operations, product knowledge, documentation, delayed payments, unnecessary queries and rigid
procedures.
There is no difference between gender of the respondents with respect to different
deficiencies factors extracted. It concludes that there is no difference between qualifications of
the respondents with respect to different deficiencies factors extracted.
It concludes that there is a difference between occupations of the respondents with
respect to capping/ limits in benefits, officials with no faith in customs, complex terms, lack of
publicity, poor treatment of officials, more exclusion, miss selling by the agents, non-cooperative
officials, un remunerative price, improper response, pp value is greater than 0.05 for all the
deficiencies extracted factors, hence null hypothesis is accepted.
Moreover, it concludes that there is no difference between number of dependents of the
respondents with respect to different deficiencies factors extracted.
There is no difference between marital status of the respondents with respect to different
deficiencies factors extracted. The study concludes that there is a difference between family type
of the respondents with respect to poor accessibility, high commission charges and rigid
procedures.
Moreover, it also concludes that there is no difference between monthly incomes of the
respondents with respect to different deficiencies factors extracted. There is no difference
between type of insurance with respect to different deficiencies factors extracted. The study
concludes that there is no difference between sum insured under the health insurance policy with
There is a difference between number of years availing health insurance policy with
respect to Poor accessibility and High commission charges. It concludes that there is no
difference between renewal status of health insurance policy with respect to different
The study inferred that there is a difference between nature of health insurance company
with respect to capping/ limits in benefits, officials with no faith in customs, complex terms, lack
of publicity, poor treatment of officials, more exclusion, miss selling by the agents, non-
cooperative officials, un remunerative price and improper response.
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There is a difference between location of the respondents with respect to purchase
intention, switchover and customer satisfaction. It concludes that there is a difference between
age of the respondents with respect to overall switchover, customer satisfaction, perception,
expectation and purchase intention. The study inferred that there is no difference between gender
of the respondents with respect to overall switchover, customer satisfaction, perception,
expectation and purchase intention.
It concludes that there is no difference between qualifications of the respondents with
intention.
There is a difference between occupation of the respondents with respect to switch over.
The study inferred that there is no difference between marital status of the respondents with
intention.
Moreover, it is concluded that there is a difference between family type with respect to
purchase intention, switch over and customer satisfaction. It concludes that there is no difference
between monthly income of the respondents with respect to overall switchover, customer
satisfaction, perception, expectation and purchase intention.
There is no difference between number of dependents in the family with respect to
It concludes that there is a difference between insurance policy type with respect to
switch over.
The study inferred that that there is a difference between sum insured under the health
insurance policy with respect to switch over. There is no difference between number of years
availing the health insurance policy respect to overall switchover, customer satisfaction,
perception, expectation and purchase intention.
It concludes that there is a difference between renewal status of health insurance policy
with respect to purchase intention. There is no difference between number of nature of health
insurance company respect to overall switchover, customer satisfaction, perception, expectation
and purchase intention.
Chi Square Test
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P value is less than 0.05 for fourth attitude factor, hence null hypothesis rejected for
fourth attitude factor. It concludes that there is a difference between insurance types with respect
to agents and employees who instill confidence in customers by proper behavior, willingness to
There is a difference between sum insured under the health insurance policy with respect
to agents and employees who instill confidence in customers by proper behavior, willingness to
It concludes that there is a difference between number of years availing health insurance
policy with respect to proving prompt service to customers, attractive and informative media and
theme layout and language of the advertisement and agents and employees who have proper
knowledge and competence to answer customers specific queries and requests.
The study inferred that there is no difference between renewal status of health insurance
policy with respect to various factors extracted from attitude variables.It concludes that there is
no difference between nature of health insurance company with respect to various factors
Correlation coefficient
The correlation coefficient between deficiencies of the health insurance services and
customer attitudes is 0.913 which indicates 91% positive correlation existing between
deficiencies of the health insurance services and customer attitudes.
Correlation coefficient between deficiencies of the health insurance services and brand
switch over is 0.253, which indicates 25% positive relation existing between deficiencies of the
health insurance services and brand switch over.
Correlation coefficient between deficiencies of the health insurance services and
customer satisfaction is 0.185 which indicates 19% positive relation existing between
deficiencies of the health insurance services and customer satisfaction.
customers expectation is 0.871 which indicates 87% positive relation existing between
deficiencies of the health insurance services and customer expectations.
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customer perception is 0.819 which shows 82% positive relation existing between deficiencies of
the health insurance services and customer perception.
Correlation coefficient between deficiencies of the health insurance services and purchase
intention is 0.744 which means 74% positive relation existing between deficiencies of the health
insurance services and purchase intention.
Correlation coefficient between customer attitudes and brand switch over is 0.182 which
means 18% positive relation existing between customer attitudes and brand switch over.
Correlation coefficient between customer attitudes and customer satisfaction is 0.166 which
means 17% positive relation is existing between customer attitudes and customer satisfaction.
Correlation coefficient between customer attitudes and customer expectation is 0.837
which shows 84% positive relation existing between customer attitudes and customer
expectations. Correlation coefficient between customer attitudes and customer perception is
0.959 which indicates 96% positive relation is existing between customer attitudes and customer
perception.
Correlation coefficient between customer attitudes and purchase intention is 0.744 which
means 74% positive relation existing between customer attitudes and purchase intention.
Correlation coefficient between brand switch over and customer expectation is 0.193
which means 19% positive relation existing between customer attitudes and customer
expectation.
Correlation coefficient between customer attitudes and customer perception is 0.169
which means 17% positive relation existing between customer attitudes and customer perception.
Correlation coefficient between customer attitudes and purchase intention is 0.177 which shows
18% positive relation exists between customer attitudes and purchase intention.
Correlation coefficient between customer satisfaction and customer expectation is 19.5%
which shows that 20% positive relation existing between brand switch over and customer
expectation.
Correlation coefficient between customer satisfaction and customer expectations is 0.147
which means 15% positive relation existing between customer satisfaction and customer
perception.
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Correlation coefficient between customer satisfaction and purchase intention is 0.211
which shows 21% positive relation existing between customer satisfaction and purchase
intention.
Correlation coefficient between customer expectations and customer perception is 0.810
which means 81% positive relation exists between customer expectations and perception.
Correlation coefficient between customer expectations and purchase intention 0.926 which
means that 93% positive relation exists between customer expectations and purchase intention.
Correlation coefficient between customer perception and purchase intention 0.721 which
means that 72% positive relation exists between customer perception and purchase intention.
GAP Analysis
Gap analysis between expected and perceived values. Maximum gap is easy access to
information (-0.28), Provisions for convertibility of products is the second maximum gap (-0.24)
and Courteous agents is the third maximum gap (-0.16). Besides, biggest gaps call for the need
for immediate attention by service provider to make improvements in these areas.
Paired T-Test
The study concludes that there is significant evidence that pair 8, pair 11, pair12, pair15,
pair16, pair17, pair 22, pair 24 and pair 25 are equal.
Multiple Regressions
The significance variable is less than 0.05 so that the group of variables attitude,
expectations, perception and purchase intention (a) can be used to reliably predict overall
satisfaction of health insurance company (the dependent variable).
The reports of relationship between the dependent variable (Overall customer
satisfaction) and customers attitude, perception, expectation, and purchase intention as
independent variables of health insurance companies.
Multiple R is the correlation coefficient (at this step) for the simple regression of
purchase intention (X1), perception (X2), expectation (X3), attitude (X4) and the dependent
variable of overall customer satisfaction (Y). R - R is the square root of R-Squared and is the
correlation between the observed and predicted values of the dependent variable.
The strength of correlation coefficient is 0.752. There is a strong positive strength of
correlation between the observed variable X1, X2, X3, X4 and predicted values of the dependent
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variable (Y).The R-square shows the percentage of variation in one variable that is accounted by
another variable. In this case the customers attitude, perception, expectation, and purchase
intention accounts values of 57% of the health insurance companies. R square (R 2) is the
correlation coefficient squared; also it is referred as the coefficient of determination. The
adjusted R-square attempts to yield an honest value to estimate the R-squared for the
population. The value of the adjusted R - square is 0.562.
The two significant coefficients for health insurance companies are perception and
expectations, non-significant coefficients are purchase intention and attitude. Since these non-
significant coefficients exceed 0.05 indicating that these variables do not contribute much to the
model. It also shows that the relative importance of significant predictors is determined by
looking at the standardized coefficient. Perception has the highest standardized coefficient with
the lowest significance (p=0.05) which means that perception is the main predictor of overall
customer satisfaction. The predicted value (regression equation) is,
Y (customer satisfaction) = -8.265 + 0.378* (perception) + 0.369* (expectation)
Acceptable values, and analytical results for the overall model. According to above table,
all fit indices of the model, with acceptable values, are eligible and this shows that the general
model is acceptable.
6.3 SUGGESTIONS
6.3.1 Restructuring the health insurance organizations to increase productivity
The health insurance companies should restructure or reorganize their health insurance
business as the results shown decrease in their efficiency and productivity for the period under
consideration. Moreover, owing to fast increasing competition their position is gradually taken
over by the private sector general insurance companies. So, efforts must be put in to cover the
untapped market in health insurance business.
6.3.2 Framing new Insurance products for general public
More number of the insurance policies should be provided by the government not only
for people below poverty line but also for general public. Policy should cover more number of
critical illnesses. Policies should be made easy to understand and show that general public is not
misguided and is given proper insurance cover. The study also highlighted the factors which are
considered by an individual while selecting or buying health insurance. Accordingly, the
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insurance companies whenever framing new health insurance products or modifying existing
health insurance products should consider these factors from the perceptive of their clients.
Similar schemes COBRA should be introduced in the Indian health insurance sector. As health
insurance policies are categorized according to the states in the USA, a similar kind of
categorization should be done in India which will lead to better services.
6.3.3 Quality of Services should be provided in non network hospitals

Cashless services should be provided in non-network hospitals. Both public and private
sector insurance companies should divert their focus from the extension of more number of
health insurance plans towards the quality and worth of services provided under these plans both
in terms of inclusion/coverage and exclusion/non coverage. Moreover, whenever introduction of
new health insurance plans is made the requirement of the particular segment of the society
should be taken care of, as the requirements differ from person to person and place to place.
6.3.4 Following uniformity in mediclaim policies
As per the latest statistics of IRDA the incurred claim ratio (claims paid amount
compared with premium received) is above 120 percent.
It is mainly because of the following reasons
Inadequate pricing especially in group health insurance schemes of corporate employers.
Inadequate mechanism to check the ex - obedient cost charged by the hospitals
Inadequate checks and controls to detect fraud linked claims
IRDA has recently defined various terms under the mediclaim policies which must be
uniformly followed by all the insurance companies. This step has removed the ambiguities and
brought in uniformities. However, some more points yet to be made more clear and requires
more explanation. The hospitals play a very important role in health care management and their
role is very important for the operation of the mediclaim policies.
The TPAs, insurance and hospitals should evolve a common protocol for treating various
illness. This will bring in some uniformity in treating the patients and will avoid unnecessary
procedures. This will also result in minimizing the health care financing.
6.3.4 Providing awareness to general public
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A mass campaign should be launched by all the insurers from a common platform by
fully exploiting all the media to create awareness about various definition, conditions and
exclusions and claims procedure applicable for the health insurance policies. This will go a long
way in educating the customers. This step will also minimize customer dissatisfaction and will
also help the growth of the market.
6.3.5 Providing Education to Both Agents and insurers
In spite of growing health insurance business the insurers have not taken much effort to
educate the customers and agents. There are lots of misselling happening resulting in customer
dissatisfaction in sorting claims. A heavy penalty should be imposed on the insurers whenever
there is a complaint against them due to misselling by their agents (this has been proposed in the
recent insurance amendment bill pending for passage for parliament)
6.3.6 Improving Technical Efficiency applicable forever
No doubt, the private sector companies are operating at increasing return to scale and also
taking the advantages of pure technical efficiency and scale efficiency, which signifies that there
is scope of much more improvement in this sector, but gradually due to market forces the
increasing return will not applicable forever i.e. as the new entrant will come this increasing
return will vanish. Accordingly, the private sector general insurance companies should try to
focus not only on health insurance business rather on standalone health insurance business.
Thereby, they can reap the fruit of master of health insurers in the insurance market. The study
provided a scope for improvement for the public sector general insurance companies, by
identifying the reasons for deterioration in their performance. As the main reasons of
deterioration in their performance is that they are not taking the advantages of pure technical
efficiency and scale efficiency. So they can overcome this by resolving the issue, which came
into light with the help of this study.
6.3.7Taking Remedies to overcome barriers
Moreover, the study highlighted the factors which act as barrier and ultimately obstruct
the subscription and extension of health insurance. Accordingly, the insurance companies can
take remedies to overcome those barriers for the extension of health insurance business.
Alternatively, the results of analysis provided that 19.8% are willing to buy only if certain
conditions are fulfilled. As far as the ranking of conditions of buying are concerned, first rank is
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assigned to if comprehensive coverage provided with least cost as its weighted average score
is3.36 is more as compared with all other conditions. Thereby, the study has provided a base for
the extension of their health insurance business by fulfilling those conditions.
6.3.8 Enhancing the scope of Productivity

Moreover, some companies in the general insurance business want to carry out health
insurance business as stand-alone business. So the study provided a base to the IRDA for the
grant of license to act as stand-alone health insurer to those general insurance companies, who
are more efficient and productive in this area and also has further scope to enhance productivity.
The study provided the parameters where deviations exist between role defined by the IRDA and
role in practice played by the TPAs. So IRDA can attempt to amend current regulations so that
sources of malpractice could be stemmed and parameters of deviations between role defined and
role played could be removed. Beside this, the study provided a framework to IRDA which
focused upon the more stringent procedure, with external expertise to evaluate the various
aspects of TPAs as well as insurance companies functioning. The appointment of external
auditors by IRDA will certainly place check on various insurance companies and TPAs with
regard to health insurance.
The study highlighted the factors which act as barrier and ultimately obstruct the
subscription and extension of health insurance. Beside this, also highlighted the factors which are
considered by an individual while selecting or buying health insurance. Accordingly, the IRDA
should frame and implement norms with due consideration to all these factors.
6.3.9 Providing Periodic Updating in the health insurance policies
A prefix compensation can be paid as a lump sum one time settlement whenever an
insured person has been diagnosed of a certain specified critical illness.
Owing to fast advancements in medical technologies the treatment procedure and
diagnosis techniques undergo lot of changes the health insurance policies, which should
address and update all such advancements so that the policies will cope up with current
scenarios in the health care management.
For adequate pricing the burning cost should be adopted to evolve adequate pricing of
the insurance products.
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The treatments through Ayurveda, homeopathy, and other alternative forms of
medicine should be included with clear definitions based on the methodology of
treatments. The people will have an option to avail benefits from such alternative
medicine also.
6.4 SCOPE OF THE FUTURE STUDY
The following areas are worth considering for undertaking research in health insurance in
India. Research can be done exclusively for analyzing the consumer behavior for service quality
of health insurance companies. Research can be done to identify the suitable marketing strategy
exclusively by for the untapped market. Area of the study can be extended to state wise and also
national level. A comparative study can be made on trends and strategies in rural and urban
areas. The research can be done for analyzing the relationship between healthcare organizations
and health insurance companies.
6.5 CONCLUSION
Large mass of people in India are not finance savvy and would like to play safe and avoid
the vagaries of the market movements so that they can plan their future income flows and not be
worried about the fatal accidents. The new private insurers coming in with the liberalization of
the sector are adding more channels of distribution in the Indian market parallel to the existing
ones. The mantra is innovation and diversification. Today in the liberalized insurance markets,
every new health insurer sells through one or more alternative distribution channels that ensure
accessibility of the insurance products to the rural people. The private companies no longer rely
solely or excessively on the agent network, that has given new way to a range of new distribution
channels telemarketing, direct marketing, corporate agents and development officers directly on
the internet. Utilizing the extensive network for selling insurance will over a period of time bring
about an increase in insurance density in private health insurance companies. Besides improving
insurance penetration in rural areas, a large unexploited potential exists that was estimated at
740million spread over 7 lakh village across a wide variety of regions in India, is still to be
explored. In order to remain competitive in a deregulated industry that has more or less
encroached all financial service providers, insurance companies and their sales representatives
have to reevaluate their traditional methods of attracting and keeping customers.
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In Erode district, to be successful in this endeavor, agents must take a closer look at just
how they treat their customers. There is no problem in case of any unforeseen events my family
can receive the amount and there is no delay in the settlements of sum assured can influence the
overall satisfaction of customers. However, in spite of the availability of many techniques and
systems for monitoring and measuring customer satisfaction and using it in decision making,
there are major implementation problems facing a customer satisfaction strategy, which been
totally ignored.
Health Insurance companies in Erode district must concentrate on overcoming these
setbacks and improve their standard in order to attract and retain the customers. Since Health
insurance in Erode district is misunderstood as health insurance by a majority of the population,
there is a need to create awareness and educate the people about the importance of Health
insurance and the various benefits that they can avail. In spite of the few loopholes in the proper
management of the health insurance sector, the number of people getting health insurance cover
is increasing. To sum up, there is a very good scope for improvement and the sector will be
fruitful in the Erode district in the near future.
242
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WEBILIOGRAPHY
www.iffcotokio.co.in
www.tataaiginsurance.in
www.royalsundaram.in
www.reliancegeneral.co.in
www.bajajallianz.com
www.icicilombard.com
www.nationalinsuranceindia.com
www.newindia.co.in
www.orientalinsurance.org.in
www.uiic.co.in
www.ashwini.org
www.fhpl.org
www.antodaya.org
www.apollohospitals.com
www.biocom.com/arogyarokshayojana
www.aaragyashri.org
www.arthiksamata.com
www.awarenessindia.com
www.baif.com
www.basixindia.com
256
www.hdfcchubbindia.com
www.biswa.org
www.caspindia.org
www.codtmsy.org
www.dhan.org
www.esafindia.org
www.grameenkota.org
www.mdindia.com
www.healing-fields.org
www.halomedicalfoundation.org
www.mdindia.org
www.fhpl.org
www.karunatrust.org
www.chin.org
www.mahasemam.org
www.mahashakti.com
www.manndeshi.org
www.manila.edu
www.mayapurtrust.org
www.rsby.in
www.mdindia.com
257
www.texmin.nic.in
www.texmin.nic.in
www.naandi.org
www.naandi.org
www.naandi.org
www.newlifemfi.org
www.prem.org.in
www.wcc-coe.org
www.sarasmilkfed.coop
www.sebahospital.org
www.sewainsurance.org
www.moscmm.org
www.sevashramindia.org
www.skdrdp.org
www.sksindia.com

www.upliftindia.org
www.villagewelfare.com
www.welfareservices.org
www.workingwomensforum.org
www.hrudayalaya.com
www.wordreference.com
258
http://www.infoplease.com/ce6/bus/A0858849.html
http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageN
o4&mid=2
http://www.investorwords.com./2289/health_insurance.html
http://www.medindia.net/patients/insurance/healthcare-insurance-terms-
anddefinitions.htm http://en.wikipedia.org/wiki/Health_insurance
http://www.healthinsuranceindia.org/need_of_health_insurance.asp
http://www.healthinsuranceindia.org/market_share_of_health_ins_india.asp
http://www.irdaindia.org/annualreport09/annual_rep_eng_09.pdf
http://www.ccfr.org.cn/cicf2006/cicf2006paper/20060130033345.pdf
http://www.microinsuranceacademy.org/microinsurance
http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_Layout.aspx?page=PageN
o25&flag=1&mid=Intermediaries >> TPA Health Services >> Regulations).
http://writing.colostate.edu/guides/research/content/pop2a.cfm
259
A STUDY ON CUSTOMER PERCEPTION ATTITUDE AND SATISFACTION
TOWARDS HEALTH INSURNACE IN ERODE DISTRICT
QUESTIONNAIRE
URBAN RURAL
1. AGE : Below 30 years 30-40 years 40-50 years

Above 50 years
2. Gender : Male Female

3. Educational qualification:
School Graduate Post-Graduate
Professional degree
4. Occupation:
Self employed Professional Government sector
Employed in private concern Others Agriculture
5. Marital Status :
Married Unmarried
If married,
a) Whether your spouse is employed?

Yes No
b) State number of children?
1-2 3-4 above 4
6. Type of family
Joint family Nuclear family
7. No. of dependents (family members) / Family type

1-2 2-3 3-4 above 4
260
8. Income (Monthly) in Rupees
Upto 10000 10000 to 20000 20000 to 30000
30000 to 50000 above 50000
9. Insurance type
Individual Family Group
10. Please specify sum insured under your health policy.
1,00,000-2,00,000 2,00,000-3,00,000 3,00,000-4,00,000
4,00,000-5,00,000 above 5,00,000
11. How long do you avail health insurance policy?
First year Two to Three years
Four to Five years above Five years
12. What is the renewal status of your health insurance policy?
Regular Discontinued Gap in renewal
13. How would you avail health insurance plan for your parents?
Self alone Spouse only Spouse and children
Spouse & Parents Self & Parents
14. From which company did you buy this health insurance?
Why do you purchase Health Insurance Policy?(Reasons)
i) To meet out medical expenses
ii) Fear (disease)
iii) Medical expenses are high
iv) Agent
v) Employer
vi) For Foreign travel / Trip
vii) Due to age (old)
viii) Family history
ix) To avoid risk
261
x) Protection
xi) Prone (for disease)
xii) Bank
xiii) Tax Exemption
xiv) Student
xv) Fear due to part experience
15. Are you aware of the following Insurance companies

Please tick the following health Insurance companies
16.1. GOVERNMENT COMPANIES 16.2. PRIVATE COMPANIES

NATIONAL ROYAL SUNDARAMS
NEW INDIA IFFCO TOCKIO
UNITED INDIA BAJAJ
ORIENTAL CHOLA MANDALAM
RELIANCE
ICICI
TATA ASG
16.3. STAND ALONE HEALTH INSURANCE COMPANIES
STAR
APPOLLO
MAX BUPA
262
16. Source of awareness (How do you aware the knowledge about health Insurance policies
and companies) through
HA A M DA HDA
17.1 Advertisement
17.2 Friends / relatives
17.3 TV
17.4 Employer
17.5 Broachers, Pamphlets
17.6 Insurance agent
17.7 Hospital
17.8 Education Institution
17.9 NGO
17.10 Other Organizations
17. While buying a Health Insurance Policy, what factors do you consider? Rate the given
statements at five point scale. (HI- Highly Important, I-Important, M-Neither important
nor not, NI- Not Important, NAI- Not at all important)
HI I M NI NAI
18.1 Willingness to help customers and the

readiness to respond to customers requests
18.2 Giving caring and individual attention to

customers by having the customers best interests
at heart
18.3 Agents and employees who instill

confidence in customers by proper behaviour
18.4 Agents and employees who understand

the specific needs of their customers
263
18.5 Apprising the customers of the nature and
schedule of services available in the organization
18.6 Providing prompt service to customers
18.7 Agents and employees who have the

proper knowledge and competence to answer
customers specific queries and requests
18.8 Effective customers grievance redressal
procedures
18.9 Attractive and informative media, theme

layout, and language of the advertisement
18.10 Visually appealing materials and facilities

associated with the service
18.11 Easy to get information about insurance

policies through T.V., newspaper, Internet etc.
rather than agents
18.12 Staff appeared neat and professional
18.13 Modern looking updated equipment,

fixtures, and facilities
18.14 Provides proper drinking water and

sanitary facilities
18.15 Branch layout has been designed to give

more space to the customers to transact business
18.16 Providing visually appealing signs,

symbols, advertisement boards, pamphlets and
other artifacts in the branch offices
18.17 comfortable physical layout of premises,

furnishings, and ambient conditions (e.g.
temperature, ventilation, noise, odor) for the
customers to interact with official staff
264
18.18 Promotes ethical conduct in everything it
does
18.19 High rate of return on insurance products

as compared to the other saving instruments (fixed
deposit in banks, national saving certificates etc.)
18.20 Adequate and necessary personnel/

agents for good customer services
18.21 Timely revival of lapsed policies, change

of nominations, addressed and mode of premium
payment etc.
18.22 Speedy documentation and processes

from the time of issue of policies up to the
settlement of claims (e.g. premium and default
notices etc.)
18.23 Number of regular meeting with agents,

discussion on each and every aspects of the policy,
analysis of various tax aspects etc. in order to buy
life insurance policy
18.24 Performing services rignt the first time
18.25 Ability of agents to give truthful advice

on investments / tax benefits etc.
18.26 Convenient to pay premium on due date
18.27 Flexible products / new products that

meet customers needs
18.28 Makiong customers feel safe and secure

in their transactions
18.29 Enhancement of technological capability

(e.g. computerization, networking of operation,
etc) to serve customers more effectively
265
18.30 Adequate and necessary facility for good
customer services
18.31 Wide use of modern and alternate mode

of premium paymentr, such as electronic clearing
system, payment through Internet etc.
18.32 Appropriate behaviour of the concerned

staff
18.33 Convenient location of the branch offices
18.34 Availability of top officials in case of

need
HA A M DA HAD
18. Overall attitude towards health insurance.
19. Rate the given aspects in Health Insurance according to your expectation
and perception at five point scale.
20.1 Adequate No. of branches E
P
20.2 Trained and well-informed E

agents P
20.3 Approaching from E

customers point of view P
20.4 Accessible location of the E
branch P
20.5 Staff dependable in E

handling customers problems P
20.6 Good ambience of the E

branch P
266
20.7 Efficient staff E
P
20.8 Easy access to information E

P
20.9 Provision of Flexible E

payment schedule P
20.10 Innovativeness in E
introducing new products P
20.11 Possessing good E

certification and credentials P
20.12 Courteous Agents E

P
20.13 Value for money E

P
20.14 Availability of flexible E

product solution P
20.15 Provisions for E

convertibility of product P
20.16 Supplementary services E

P
20.17 Prompt & Efficient E

Grievance handling mechanism P
20.18 Simple & Less time E

consuming procedure for P
purchasing a policy
20.19 Trusting agents when E
267
explaining policies P
20.20 Financially stable company E

P
20.21 Clarity in explaining E
policys terms and conditions P
20.22 Easy online transaction E

P
20.23 Complaint handling should E

be prompt, online P
20.24 Proactive information E

through e-mail or sms P
20.25 Prompt and hassle free E

claims settlement P
20.26 Understanding intimately E

specific needs P
HA A M DA HDA
20. Overall customers perception
towards health insurance.
21. Deficiencies in Health Insurance companies: Rate the given deficiencies at

five point scale.
HA A M DA HDA
22.1 Product knowledge
22.2 Rigid procedures
22.3 Delay in operations
22.4 Lack of financial assistance in time
268
22.5 Commitment to Hospital
22.6 Documentation
22.7 Unnecessary queris

22.8 Under coverage
22.9 Delayed payments
22.10 Un-remunerative price
22.11 Poor treatment of officials
22.12 Non co-operative officials
22.13 Officials with no faith in customs
22.14 Misselling by the Agent
22.15 More exclusion
22.16 Capping / limits in benefits
22.17 Complex terms
22.18 Lack of publicity
22.19 Improper responses
22.20 High commission charges
22.21 Poor accessibility
22.22 Poor in personal attention
In case of Reimbursement claim
22. How long it took to get the claim?
Less than 15 days
Less than one month
269
Less than two months
More than two months
23. Have you been property guided to get the claims?

Insurance company TPA (Third Party Administrators)
Agent Employer
Friend and Relatives Hospital None
24. Do you find the medi-claim policy meets your requirement?

Yes No
IF yes,
25.1.1 Adequacy sum Insured
25.1.2 Adequacy of coverage
25.1.3 Simplified procedure
IF so,
25.2.1 Inadequacy coverage
25.2.2 Inadequate sum Insured
25.2.3 Complicated procedures
25.2.4 Bad service
25. Portability
Do you switch over (Portability) the policy from one company to another company?
Yes No
IF yes,
26.1 Poor follow-up

26.2 Poor servicing
270
26.3 Poor claim settlement
26.4 Delay
26.5 Deductions
26.6 Unnecessary queries
26.7 Too much of documentation
26.8 Not satisfied with agent
26.9 Better scheme
26.10 Attractive Premium
26.11 Competitive premium
26.12 Transparency
26.13 Better benefits
271

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A STUDY ON CUSTOMER PERCEPTION ATTITUDE AND

SATISFACTION TOWARDS HEALTH INSURANCE IN

2 BPL Below Poverty Line

3 CHI Commission for Health Improvement

4 CBHI Community-Based Health Insurance

5 CFI Comparative Fit Index

6 DEA Data Envelopment Analysis

7 DCP Day Care Procedure

9 ESIS Employee State Insurance Scheme

10 ESI Employees State Insurance

11 ERM Enterprise Risk Management

12 FGD Focus Group Discussions

13 FICCI Federation of Indian Chamber of Commerce and Industry

14 FDI Foreign Direct Investment

15 GIC General Insurance Corporation of India

16 GIPSA General Insurance Public Sector Companies Association

17 GFI Goodness Fit Index

18 GDP Gross Domestic Product

19 GATS General Agreement on Trade in Services

20 GNP Gross National Product

21 IRDA Insurance Regulatory and Development Authority

22 ICR Incurred Claims Ratio

24 SHG Self Help Groups

25 MSA Measure of Sampling Adequacy

26 NGO Non Governmental Organizations

28 NSSO National Sample Survey Organization

29 NCAER National Council of Applied Economic Research

30 NIPFP National Institute of Public Finance and Policy

32 PHC Primary Health Centres

33 PPN Preferred Provider Network

34 RAM Range Adjusted Measure

35 RFI Relative Fit Index

36 RMSEA Root Mean Square Error Approximation

37 RSBY Rashtriya Swasthiya Bima Yojna

38 SEWA Self-Employed Womens Association

39 TPA Third Party Administrator

40 UHI Universal Health Insurance

41 UNDP United Nation Development Programme

42 WTO World Trade Organization

43 WHO World Health Organization

Chapter No Title of the Chapter Page No

I Introduction and Design of the Study 1

11 Review of Literature and Gap Analysis 17

111 Growth and Development of Health Insurance at Erode

IV Analysis of Consumers Perception and Attitude Towards

V Analysis of Consumers Purchase Intention, Expectations

VI Findings, Suggestions and Conclusion 215

Appendix Questionnaire i xii

Table No Title of the Tables Page No

INTRODUCTION AND DESIGN OF THE STUDY

1.2 NEED OF THE STUDY

Health insurance is an important vehicle for health care financing, especially in a

1.3 THE STATEMENT OF THE PROBLEM

To what extent the demographic characteristics of customers influence the Health

1.5.2 Cashless services

1.5.3 Coverage Amount

1.5.4 Cumulative bonus

1.5.5 Domiciliary Hospitalization

When treatment of a patient is carried out at home, as per the doctors

1.5.7 Moral Hazard

1.5.8 Network Hospital

It is a discount on the basic premium, if there is a claim-free year of policy. In other

1.5.10 Pre-existing disease

A pre-existing disease is any ailment or disease with which a person is already